Office of Workers' Compensation - Federal Employees' Compensation Act

High-priority program

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Program level Payment Integrity results

Sponsoring agency: Department of Labor

PROGRAM METRICS

$2,939 M

in FY 2021 outlays, with a

97.2%

payment accuracy rate

PROGRAM METRICS

$2,923 M

in FY 2022 outlays, with a

96.9%

payment accuracy rate

PROGRAM METRICS

$3,263 M

in FY 2023 outlays, with a

97.6%

payment accuracy rate

PROGRAM METRICS

$3,625 M

in FY 2024 outlays, with a

97.7%

payment accuracy rate

PROGRAM METRICS

$3,955 M

in FY 2025 outlays, with a

97.2%

payment accuracy rate

  • Improper payment estimates over time
    View as:

    Chart toggle amounts:
    Proper payments
    Overpayment
    Underpayment
    Technically improper
    Unknown

Payment Integrity results

  • FY 2021 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2020 - 06/2021


    Confidence interval:

    >90%


    Margin of error:

    +/-2.0

Overpayments

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $4.78 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $4.78 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $58.72 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $41.32 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $17.4 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $15.43 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $15.43 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Technically improper payments

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.28 M

Additional information

$15.71 M

Unknown Payment Details

The program is unable to discern whether the payment was proper or improper as a result of insufficient documentation or discrepancies involving various elements of payments. The beneficiaries employing Federal agency, is required to provide all salary information when a claim for wage-loss is submitted. In most instances, the information provided by the Federal employing agency is incomplete or inaccurate. This highlights the ongoing challenges facing the program’s payment process, namely reliance on reporting by other Federal agencies to provide accurate information.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $2.54 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

The program implemented new operational and performance plans which include requirements to measure and accountability review of payments will assist in identifying individual employee is training needs to help them improve payment accuracy where needed. The program continues to expand innovative learning processes with resource modules, video, and simulations for policy and procedures to prevent IPs.

Future payment integrity outlook

Office of Workers' Compensation - Federal Employees' Compensation Act has established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $3,000 M
Current year +1 estimated future improper payments $93 M
Current year +1 estimated future unknown payments $2.5 M
Current year +1 estimated future improper payment and unknown payment rate 3.18 %

The program's current year improper payment and unknown payment rate of 2.78 % has been achieved with a balance of payment integrity risk and controls and represents the lowest rate that can be achieved without disproportionally increasing another risk, therefore it is the tolerable rate.

The program has staff responsible for reducing and establishing and maintaining sufficient internal controls towards the reduction of IPs. The program utilizes the Integrated Federal Employees Compensation System (iFECS) to administer the program. iFECS is a major application that provides a case management system to support core business functions and includes three sub-components, the Agency Query System (AQS), the Claimant Query System (CQS) and the Employees' Compensation Operations and Management Portal (ECOMP). iFECS was established to provide FECA with an automated case management system. The system provides data processing, financial and program management, as well as decision support functionalities to authorized users. iFECS maintains an automated record of all claims filed, adjudicatory statuses and benefits paid and denied. Data on entitlement and benefits payment status maintained on iFECS is available in accordance with the Privacy Act to authorized claimants, authorized representatives, and authorized user organizations verbally via telephone and in paper/electronic formats.

Additional programmatic information

  • FY 2022 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2021 - 06/2022


    Confidence interval:

    90% to <95%


    Margin of error:

    +/-2.5

Overpayments

Payments are within agency control because they are either issued directly by program staff or through the agency's contractor, which utilizes a system programmed to the specifications of the agency. Throughout the year, the agency conducts audits of both internal and system processes to identify issues. The agency has staff with duties focused on reviewing payment processing to ensure compliance with established procedures.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $6.4 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $6.4 M

Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $70.59 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $45.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $25.59 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $7.54 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $7.54 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Technically improper payments

Beneficiaries who are totally disabled and receive period-roll payments, are required to submit medical document to support ongoing disability from work. If a beneficiary fails to submit requested medical reports, or the medical evidence shows the beneficiary is able to return to work or full recovered, the program may suspend or terminate benefits. However, statutory and regulatory barriers limit the program’s ability to stop or adjust payments based on a medical review without due process. The compensation payments would continue until a final decision is issued.
The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $3.93 M

Additional information

$11.47 M

Unknown Payment Details

The program is unable to discern whether the payment was proper or improper as a result of insufficient documentation or discrepancies involving various elements of payments. The beneficiaries employing Federal agency, is required to provide all salary information when a claim for wage-loss is submitted. In most instances, the information provided by the Federal employing agency is incomplete or inaccurate. This highlights the ongoing challenges facing the program’s payment process, namely reliance on reporting by other Federal agencies to provide accurate information.

The amount of payments that could either be proper or improper but the agency is unable to determine whether they were proper or improper as a result of insufficient or lack of documentation is $3.26 M


Cause of insufficient or lack of documentation & why the documentation is needed for determination of payment type
Payment cause Amount Description of the documentation that was not provided and explanation of why the program is unable to conclude whether the payment is proper or improper without that documentation

Evaluation of corrective actions

The program plans to continue to utilize resources provided by Treasury's Do Not Pay program. Additionally, the agency will continue to look at other cross enterprise sharing opportunities that may arise in the future.
It will continue to utilize its current audit corrective actions with its staff and current medical bill pay contractors. As needed, the program may add additional auditing actions to identify areas that may be of concern to stakeholders. Additionally, the agency will fully cooperate with the OIG's auditing program as part of the Department's annual financial reporting requirements. Unit/Office level actions will focus on issues that can cause IP's/UP's such as compensation rate reviews and official pay rate determinations. Use of Cross Enterprising sharing will help the program's effort to focus on the cause of eligibility issues such as offsetting and deceased persons. Monthly medical bill pay audits ensure the program's medical bill contractors are processing payments consistent with program requirements. The course of action planned allows the agency to monitor payments and identify potential IP/UP's and their root causes at multiple levels. Additionally, the use of data allows the program to combine individual audit findings into trends to perform root cause analysis. This multilayered approach can lead to identifying trends, which will lead to better training and potentially automated controls to reduce future improper payments. The agency will continue to prioritize payment processing and the identification of improper payments. Each week, the program makes millions of dollars and payments and regular monitoring is key to future root cause analysis. The agency will also look for opportunities that may lead to implementation of systematic controls as well as it's efforts to redress over and under payments after they have been identified.

Future payment integrity outlook

Office of Workers' Compensation - Federal Employees' Compensation Act has established a baseline.

The improper payment rate includes adjudicated fraud as established by the courts and averaged over the last three years. OWCP does not have
direct control over the amount of adjudicated fraud that occurs each year. Due to agency success in uncovering fraud and OIG’s successful prosecution of high-dollar cases, court ordered adjudicated amounts may continue to rise on average before dropping as these fraudsters are caught.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $3,100 M
Current year +1 estimated future improper payments $95 M
Current year +1 estimated future improper payment and unknown payment rate 3.06 %
Current year +1 estimated future improper payment and unknown payment reduction target 3.25 %

The program's current year improper payment and unknown payment rate of 3.14 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

The program remains committed to reducing its’ IPs by focusing on identifying, reporting and implementing new policies to reduce areas of vulnerabilities, however, due to some of these actions the rate will remain at a base level. DOL’s Office of Workers’ Compensation (OWCP) estimates that the FECA program’s IP rate will increase in FY 2023, due to FECA’s increased capacity to root out what is considered fraudulent IPs.

The agency has sufficient resources to reduce improper and unknown payments. There is sufficient staff to conduct the necessary audits and reviews as well as the necessary infrastructure to update information systems. Additionally, the agency has working arrangements with other federal agencies to provide the information needed to issue payments.

The budget submission includes a request for funds for human capital. The agency also included requests to further it's capabilities with the ECOMP system.

Additional programmatic information

  • FY 2023 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2022 - 06/2023


    Confidence interval:

    90% to <95%


    Margin of error:

    +/-2.5

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Training
    The agency has a robust training program in place to prevent improper payments. Training is done at the unit/office level as well as through the National Office. There is also training for corrective actions available using online platforms. This corrective action is an iterative and cyclical, OWCP provides ongoing training to staff - it is never complete
    The corrective action was not fully completed this reporting period
    Not Completed
    Training
    The program will continue to use training corrective action plans. As a result of staff turnover training continues throughout the year and the program utilizes on the spot corrective action and training to ensure issues are identified on the case level.
    FY2027+
    Planned

Overpayments

Payments are within agency control because they are either issued directly by program staff or through the agency's contractor, which utilizes a system programmed to the specifications of the agency. Throughout the year, the agency conducts audits of both internal and system processes to identify issues. The agency has staff with duties focused on reviewing payment processing to ensure compliance with established procedures.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $7.44 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $7.44 M

Inability to access data/information needed is outside of the agencies control. Statutory and regulatory barriers limit the program’s ability to stop or adjust payments based on a medical review. The program cannot directly access wage data or dual benefit eligibility data housed by other Federal agencies. The program continues to explore cost-effective methods to mitigate improper payments, through training, cross agency communication and via annual benefit entitlement questionnaires.
Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $55.82 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $43.42 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $12.4 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Outside Agency Control Deceased $1.67 M
Overpayments Outside Agency Control Employment $49.68 M
Overpayments Outside Agency Control Marital Status $4.47 M
Overpayments Within Agency Control Deceased $0.07 M
Overpayments Within Agency Control Employment $7.37 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Training Training

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $11.21 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $11.21 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Eligibility element/information needed Eligibility amount
Deceased $0.34 M
Employment $9.98 M
Marital Status $0.9 M

Mitigation strategies taken Mitigation strategies planned
Training Training

Technically improper payments

Beneficiaries who are totally disabled and receive period-roll payments, are required to submit medical document to support ongoing disability from work. If a beneficiary fails to submit requested medical reports, or the medical evidence shows the beneficiary is able to return to work or full recovered, the program may suspend or terminate benefits. However, statutory and regulatory barriers limit the program’s ability to stop or adjust payments based on a medical review without due process. The compensation payments would continue until a final decision is issued.
The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $5.01 M

Mitigation strategies taken Mitigation strategies planned
Training Training

Additional information

$16.22 M

Unknown Payment Details

Evaluation of corrective actions

The program plans to continue to utilize resources provided by Treasury's Do Not Pay program. Additionally, the agency will continue to look at other cross enterprise sharing opportunities that may arise in the future. It will continue to utilize its current audit corrective actions with its staff and current medical bill pay contractors. As needed, the program may add additional auditing actions to identify areas that may be of concern to stakeholders. Additionally, the agency will fully cooperate with the OIG's auditing program as part of the Department's annual financial reporting requirements. Unit/Office level actions will focus on
issues that can cause IP's/UP's such as compensation rate reviews and official pay rate determinations. Use of DNP will help the program's effort to focus on the cause of eligibility issues such as offsetting and deceased persons. Monthly medical bill pay audits ensure the program's medical bill contractors are processing payments consistent with program requirements. The course of action planned allows the agency to monitor payments and identify potential IP/UP's and their root causes at multiple levels. Additionally, the use of data allows the program to combine individual audit findings into trends to perform root cause analysis. This multilayered approach can lead to identifying trends, which will lead to better training and potentially automated controls to reduce future improper payments. The agency will continue to prioritize payment processing and the identification of improper payments. Each week, the program makes millions of dollars and payments, and regular monitoring is key to future root cause analysis. The agency will also look for opportunities that may lead to implementation of systematic controls as well as its efforts to redress over and under payments after they have been identified.

Future payment integrity outlook

Office of Workers' Compensation - Federal Employees' Compensation Act has established a baseline.

The improper payment rate includes adjudicated fraud as established by the courts and averaged over the last three years. OWCP does not have direct control over the amount of adjudicated fraud that occurs each year. Due to agency success in uncovering fraud and OIG’s successful prosecution of high-dollar cases, court ordered adjudicated amounts may continue to rise on average before dropping as these fraudsters are caught.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $3,500 M
Current year +1 estimated future improper payments $100 M
Current year +1 estimated future improper payment and unknown payment rate 2.86 %
Current year +1 estimated future improper payment and unknown payment reduction target 3.15 %

The program's current year improper payment and unknown payment rate of 2.44 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

The program remains committed to reducing its’ IPs by focusing on identifying, reporting and implementing new policies to reduce areas of vulnerabilities, however, due to some of these actions the rate will remain at a base level. DOL’s Office of Workers’ Compensation (OWCP) estimates that the FECA program’s IP rate will increase in FY 2024, due to FECA’s increased capacity to root out what is
considered fraudulent IPs.

The agency has sufficient resources to reduce improper and unknown payments. There is sufficient staff to conduct the necessary audits and reviews as well as the necessary infrastructure to update information systems. Additionally, the agency has working arrangements with other federal agencies to provide the
information needed to issue payments.

The budget submission includes a request for funds for human capital. The agency also included requests to further it's capabilities with the ECOMP system.

Additional programmatic information

  • FY 2024 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2023 - 06/2024


    Confidence interval:

    90% to <95%


    Margin of error:

    +/-2.5

  • Actions taken & planned to mitigate improper payments

    Mitigation strategy Description of the corrective action Completion date Status
    Training
    The agency has a robust training program in place to prevent improper payments. Training is done at the unit/office level as well as through the National Office. There is also training for corrective actions available using online platforms. This corrective action is iterative and cyclical, OWCP provides ongoing training to staff - it is never complete.
    The corrective action was not fully completed this reporting period
    Not Completed
    Training
    The program will continue to use training corrective action plans. As a result of staff turnover training continues through the year and the program utilizes on the spot corrective action and training to ensure issues are identified on the case level.
    FY2028+
    Planned

Overpayments

Payments are within agency control because they are either issued directly by program staff or through the agency’s contractor, which utilizes a system programmed to the specifications of the agency. Throughout the year, the agency conducts audits of both internal and system processes to identify issues. The agency has staff with duties focused on reviewing payment processes to ensure compliance with established procedures.
Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $2.94 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $2.94 M

Inability to access data/information needed is outside of the agency’s control. The program cannot directly access wage data or dual benefit eligibility data housed by other federal agencies. The program continues to explore cost-effective methods to mitigate improper payments through training, cross agency communication and via annual benefit entitlement questionnaires.
Overpayment root cause Overpayment amount
Amount of overpayments outside the agency's control $72.2 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $39.34 M
The amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $32.86 M
The amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

Overpayment type Eligibility element/information needed Eligibility amount
Overpayments Outside Agency Control Deceased $20.94 M
Overpayments Outside Agency Control Employment $20.94 M
Overpayments Outside Agency Control Marital Status $30.32 M
Overpayments Within Agency Control Deceased $1.47 M
Overpayments Within Agency Control Employment $1.47 M

Overpayment type Mitigation strategies taken Mitigation strategies planned
Overpayments within the agency’s control Training Training

Underpayments

Underpayment root cause Underpayment amount
Amount of underpayments $2.77 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $0.0 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $0.0 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $2.77 M

Eligibility element/information needed Eligibility amount
Marital Status $2.77 M

Mitigation strategies taken Mitigation strategies planned
Training Training

Technically improper payments

Beneficiaries who are totally disabled and receive periodic roll payments, are required to submit medical documentation to support ongoing disability from work. If a beneficiary fails to submit requested medical reports, or the medical evidence shows the beneficiary can return to work or full recovered, the program may suspend or terminate benefits. However, statutory and regulatory barriers limit the program’s ability to stop or adjust payments based on medical review without due process. The compensation payments would continue until a final decision is issued.
The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $7.0 M

Mitigation strategies taken Mitigation strategies planned
Training Training

Additional information

$9.77 M

Unknown Payment Details

Evaluation of corrective actions

The program plans to continue to utilize resources provided by Treasury's program integrity center. It will continue to utilize its current audit corrective actions with its staff and current medical bill pay contractors. As needed, the program may add additional auditing actions to identify areas that may be of concern to stakeholders. Additionally, the agency will fully cooperate with the OIG's auditing program as part of the department's annual financial reporting requirements. Unit/Office level actions will focus on issues that cause IP's/UP's such as compensation rate reviews and official pay rate determinations. Use of Treasury's program will help the program's effort to focus on the cause of eligibility issues such as offsetting and deceased persons. Monthly medical bill pay audits ensure the program's medical bill contractors are processing payments consisted with program requirements. The course of action planned allows the agency to monitor payments and identify potential IP/UP's and their root causes at multiple levels. Additionally, the use of data allows the program to combine individual audit findings into trends to perform a root cause analysis. This multilayered approach can lead to identifying trends, which will lead to better training and potentially automated controls to reduce future improper payments. The agency will continue to prioritize payment processing and the identification of improper payments. Each week, the program makes millions of dollars of payments, and regular monitoring is key to future root cause analysis. The agency will also look for opportunities that may lead to implementation of systematic controls as well as its efforts to address over and under payments after they have been identified.

The course of action planned allows the agency to monitor payments and to identify potential IPs/UPs and their root causes at multiple levels. Additionally, the use of data allows the program to combine individual audit findings into trends to perform root cause analysis. This multilayered approach can lead to identifying trends, which will lead to better training and potentially automated controls to reduce future improper payments.

Unit/office level actions will focus on issues that can cause IPs/UPs such as compensation rate reviews and official pay rate determinations. Use of agency information sharing will help the program's effort to focus on the cause of eligibility issues such as offsetting and deceased persons. Monthly medical bill pay audits ensure the program's medical bill pay contractors are processing payments consistent with program requirements.

The agency will continue to prioritize payment processing and the identification of improper payments. Each week, the program makes millions of dollars in payments and regular monitoring is key to future root cause analysis. The agency will also look for opportunities that lead to implementation of systematic controls as well as its efforts to address over and under payments as they have been identified.

Future payment integrity outlook

Office of Workers' Compensation - Federal Employees' Compensation Act has NOT established a baseline.

Out-Year improper payment and unknown payment projections and target
Current year +1 estimated future outlays $3,987.5 M
Current year +1 estimated future improper payments $93.38 M
Current year +1 estimated future unknown payments $0 M
Current year +1 estimated future improper payment and unknown payment rate 2.34 %

The program's current year improper payment and unknown payment rate of 2.34 % may or may not be the tolerable rate. The agency has not yet determined the tolerable rate for this program.

The program remains committed to reducing its IPs by focusing on identifying, reporting and implementing new policies to reduce areas of vulnerabilities. However, the agency estimates that the FECA program's IP rate could increase due to its capability to identify and assist with the pursuit of fraud adjudication.

The agency has sufficient resources to reduce improper and unknown payments. There is sufficient staff to conduct the necessary audits and reviews as well as the necessary infrastructure to update information systems. Additionally, the agency has working arrangements with other federal agencies to provide the information needed to issue payments.

The budget submission includes a request for funds for human capital.

Additional programmatic information

Accountability for detecting, preventing, and recovering improper payments

The program has staff responsible for establishing and maintaining sufficient internal controls toward the reduction of IPs. The program incorporates internal controls into the annual performance standards of agency managers and subordinate staff to ensure focus on understating and preventing IPs. Agency managers are held responsible and accountable for meeting proper payment rates. On a monthly basis, managers are required to submit results of IPs identified through audit results and supervisor reviews. The program also conducts quarterly meetings with the OIG and the medical bill contractor's staff to discuss the identification of potentially fraudulent activity.

  • FY 2025 improper payment estimates

    Chart legend and breakdown

    Payment accuracy rate

    Improper payment rate

    Unknown payment rate


    Sampling & estimation methodology details

    Sampling timeframe:

    07/2024 - 06/2025


    Confidence interval:

    90% to <95%


    Margin of error:

    +/-2.5

Causes

The program’s improper and unknown payments are broken down into 3 categories; medical payments; compensation payments and rolling 3-year average of adjudicated fraud.

The program utilizes a medical bill pay contractor to process claims for reimbursement for services. The bill pay system is automated and coded to process reimbursements based on inputs from providers and staff, which may include miss keyed data elements.
Compensation payments determined to be improper, or unknown are caused by a lack of available data to support dependency and marital status determinations. Another cause is the program’s inability to access payrate information from payroll service providers and benefit payments being made by other federal agencies.

Adjudicated fraud is determined by the courts, and the program has no control over the amount of restitution awarded each year. However, the program’s Program Integrity Unit (PIU) plays an integral role in identifying fraud through different types of audit procedures and collaborates with the OIG community and Department of Justice to pursue civil and criminal charges, whenever appropriate.

Overpayment root cause Overpayment amount
Amount of overpayments within the agency's control $2.49 M
Amount of overpayments outside the agency's control $97.66 M
Amount of overpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $89.34 M
Amount of overpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $8.32 M
Amount of overpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $2.49 M

Underpayment root cause Underpayment amount
Amount of underpayments $9.6 M
The amount of underpayments that occurred because the data/information needed to validate payment accuracy prior to making a payment does not exist $1.51 M
The amount of underpayments that occurred because of an inability to access the data/information needed to validate payment accuracy prior to making a payment $8.09 M
The amount of underpayments that occurred because of a failure to access data/information needed to validate payment accuracy prior to making a payment $0.0 M

The amount of improper payments that were paid to the right recipient for the correct amount but were considered technically improper because of failure to follow statute or regulation $0.0 M

The amount that could either be proper or improper but the agency is unable to determine whether it was proper or improper as a result of insufficient or lack of documentation $0.0 M

Prevention

The agency has a robust training program in place to prevent improper payments. Training is done at the unit/office level as well as through the National Office. There is also training for corrective actions available using online platforms. This corrective action is iterative and cyclical, OWCP provides ongoing training to staff - it is never complete.
The program plans to continue to utilize resources provided by Treasury's program integrity center. It will continue to utilize its current audit corrective actions with its staff and current medical bill pay contractors. As needed, the program may add additional auditing actions to identify areas that may be of concern to stakeholders. Additionally, the agency will fully cooperate with the OIG's auditing program as part of the department's annual financial reporting requirements. Unit/Office level actions will focus on issues that cause IP's/UP's such as compensation rate reviews and official pay rate determinations. Use of Treasury's program will help the program's effort to focus on the cause of eligibility issues such as offsetting and deceased persons. Monthly medical bill pay audits ensure the program's medical bill contractors are processing payments consisted with program requirements. The course of action planned allows the agency to monitor payments and identify potential IP/UP's and their root causes at multiple levels. Additionally, the use of data allows the program to combine individual audit findings into trends to perform a root cause analysis. This multilayered approach can lead to identifying trends, which will lead to better training and potentially automated controls to reduce future improper payments. The agency will continue to prioritize payment processing and the identification of improper payments. Each week, the program makes millions of dollars of payments, and regular monitoring is key to future root cause analysis. The agency will also look for opportunities that may lead to implementation of systematic controls as well as its efforts to address over and under payments after they have been identified .

The course of action planned allows the agency to monitor payments and to identify potential IPs/UPs and their root causes at multiple levels. Additionally, the use of data allows the program to combine individual audit findings into trends to perform root cause analysis. This multilayered approach can lead to identifying trends, which will lead to better training and potentially automated controls to reduce future improper payments.

Payment type Mitigation strategies taken Mitigation strategies planned
Overpayments Training Training
Underpayments Training Training

Eligibility element/information needed Description of the eligbility element/information
Employment The employment status of the recipient/beneficiary
Marital Status A person's state of being single, married, separated, divorced, or widowed
Receiving Benefits from Other Sources Beneficiary or recipient is receiving benefits from an additional source

Additional information

Reduction target

3.05 %

The agency has sufficient resources to reduce improper and unknown payments. There is sufficient staff to conduct the necessary audits and reviews as well as the necessary infrastructure to update information systems. Additionally, the agency has working arrangements with other federal agencies to provide the information needed to issue payments.

The budget submission includes a request for funds for human capital. In FY 2026, the FECA program will continue its ongoing program integrity efforts through data analytics, payment audits, and improper payment reporting to ensure compliance with PIIA.

The program has staff responsible for establishing and maintaining sufficient internal controls toward the reduction of IPs. The program incorporates internal controls into the annual performance standards of agency managers and subordinate staff to ensure focus on understating and preventing IPs. Agency managers are held responsible and accountable for meeting proper payment rates. On a monthly basis, managers are required to submit results of IPs identified through audit results and supervisor reviews. The program also conducts quarterly meetings with the OIG and the medical bill contractor's staff to discuss the identification of potentially fraudulent activity.

$9.6 M