House subcommittee examines FECA reform amid fraud concerns, access problems and postal costs

WASHINGTON — The House Committee on Education and Labor’s Subcommittee on Workforce Protections convened a hearing in Washington to examine the Federal Employees’ Compensation Act (FECA), the century-old workers’ compensation program for federal employees, and to consider proposals to curb fraud, expand access to care and reduce long-term costs.

“FECA is more than just a compensation statute. It is a solemn promise,” Ranking Member Ilhan Omar said in her opening statement, arguing that reforms should center on how changes help injured workers. Chairman Wahlberg and other members framed the hearing as an opportunity for bipartisan updates to a law last changed in a major way more than 50 years ago.

The hearing brought four witnesses: Scott Simondaren of the Congressional Research Service, Luis Santos, acting inspector general at the Department of Labor (DOL) OIG, Brian Renfro, national president of the National Association of Letter Carriers (NALC), and Tammy Hull, inspector general of the U.S. Postal Service (USPS) OIG. They described overlapping concerns and divergent priorities: reducing waste, fraud and abuse; improving injured workers’ access to timely medical care; and addressing costs borne by the Postal Service.

Why it matters: FECA provides wage replacement, medical care and vocational rehabilitation to federal employees injured on duty. Witnesses and members said the program’s scale and open provider rules have created vulnerabilities to fraud and long-term fiscal pressures. Lawmakers emphasized the need to preserve benefits for legitimately injured workers while giving agencies more tools to detect improper payments.

Key figures and findings

- The chairman noted that FECA covers roughly 2,600,000 civilian federal employees and related workers and that in fiscal year 2024 the program opened more than 86,000 new cases and provided over $2.9 billion in benefits to more than 178,000 workers and survivors. (Opening statement by the chair.)

- DOL OIG Acting Inspector General Luis Santos told the subcommittee his office opened more than 320 investigations since FY2015 that led to 322 convictions and more than $1.7 billion in monetary outcomes; he described a scheme in which compound creams made from about $15 of materials were billed to FECA at roughly $16,000 each, producing a $405 million forfeiture in one case.

- USPS OIG Tammy Hull said the Postal Service paid nearly $1.5 billion in claims in the prior year plus about $96 million in administrative fees, and argued that FECA’s lack of lump-sum settlements, duration limits and other private-sector cost-containment tools increases long-term Postal liabilities. As of last fall, she said more than 600 postal employees age 80 or older were still receiving benefits.

- Scott Simondaren of CRS cautioned that FECA is more generous than most state systems, noting differences such as augmented compensation for beneficiaries with dependents (raising some payouts to 75% of pre-disability wage) and a statutory continuation-of-pay provision for traumatic injuries. He outlined tradeoffs in proposals that have previously been raised, including converting some beneficiaries to retirement benefits and changing the waiting-period structure.

Access to care: HR 3170 and provider limits

Several members, led by Chairman Wahlberg and Rep. Joe Courtney, discussed bipartisan legislation (HR 3170, Improving Access to Workers’ Compensation for Injured Federal Workers Act) to allow state-licensed physician assistants and nurse practitioners to certify and treat FECA claims. “This bipartisan bill amends FECA to allow injured workers to receive treatment for work related injuries from state licensed physician assistants and nurse practitioners,” Chairman Wahlberg said, citing rural provider shortages. CRS and NALC witnesses said expanding the pool of authorized treaters could improve timeliness of care but would not by itself fix administrative and payment-system barriers that discourage some providers from participating.

Fraud prevention and data access

DOL OIG urged statutory access for the Office of Workers’ Compensation Programs (OWCP) to Social Security wage records and the National Directory of New Hires (NDNH) to speed detection of underreported outside employment and returned-to-work cases. Santos recommended OWCP be authorized to suspend indicted medical providers from program participation. Postal OIG and DOL OIG described extensive data-analytic reviews that have uncovered provider overbilling, excessive travel reimbursements and claimant fraud; USPS OIG said it opened roughly 1,000 cases over five years related to claimant fraud and more than 100 related to provider fraud.

Pharmaceutical vulnerabilities and program integrity

Witnesses described a history of targeted fraud in pharmaceutical reimbursements. Santos and Hull credited OWCP and other program changes with large reductions in problematic pharmaceutical spending since FY2016, but both urged continued oversight and statutory tools to block abusive providers and prescriptions.

Postal workplace risks and safety

NALC President Brian Renfro emphasized workplace hazards for letter carriers — heat injuries, increased violent crime and vehicle accidents — and said prevention and timely care are central to reducing FECA usage. USPS OIG noted training shortfalls and vehicle air-conditioning gaps in some routes as factors in heat-related illnesses.

Schedule awards and benefit structure

CRS testimony noted the FECA schedule of awards has not been substantially updated since 1966, while medical impairment guides and other federal and state schedules have evolved. CRS recommended Congress consider whether updates should be made by statute or by delegated rulemaking.

No formal actions taken

The hearing was an information-gathering session; members and witnesses offered recommendations, but the subcommittee did not vote on legislation. Members said they expect bipartisan follow-up work to consider statutory changes, data-sharing authorities and administrative fixes.

What’s next

Members signaled continued bipartisan engagement. Several called for statutory changes to give OWCP new data-access authorities and to allow additional provider types to certify FECA claims; witnesses urged balancing access, safety and fraud controls. Lawmakers and witnesses agreed that reforms should prioritize injured workers’ access to care while strengthening measures to detect and prevent improper payments.

Sources: oral testimony and exchanges at the House Committee on Education and Labor, Subcommittee on Workforce Protections hearing on the Federal Employees’ Compensation Act, Washington, D.C.