NEWS on the Federal Employees Compensation Act and Prescription Drug Abuse

The Federal Employees Compensation Act (FECA) covers 2.7 million federal employees and postal workers and paid out $1.9 billion in wage-loss compensation, impairment and death benefits and $898 million in medical and rehabilitation services and supplies during the 2010 charge back year, which ended June 30, 2010.

There have been no major revisions to the law since 1974. Currently there are two bills pending. Both would put in place a few significant changes. “The Federal Workers Compensation Modernization and Improvement Act” (HR 2465), was passed in the House and has been sent to the Senate Committee on Homeland Security and Government Affairs. Another proposal that originated in the Senate, “The 21st Century Postal Service Act of 2011” (S1789) has made it out of committee. Both include significant provisions related to FECA reform.(WCxKit)


There are several provisions
in the current version of the bill that would have a material impact on the claimants and the manner in which claims are managed. Section 302, Federal Workers Compensation Reforms for Retirement Age Employees, will reduce total available compensation rates and re-define coverage at and beyond retirement age. This particular provision would have a positive effect on cost as well as remove any notion that FECA is a retirement plan.

This legislation also includes provisions that are directly related to case management; one in particular supports increased involvement by the employing agency in managing its’ workers compensation claims. This provision requires an independent medical assessment of disability and potential for return to work for beneficiaries after six months of disability and on a regular basis thereafter.

Currently, federal agencies do not have the authority to schedule or direct the scheduling of independent medical evaluations. They can request that the Department of Labor set up an exam, but the final decision on whether and when to refer for an IME (independent medical evaluation) is in the hands of the claims examiner (DOL). In addition to requiring periodic scheduling of independent medical evaluations by the DOL, the current draft of the proposed legislation provides a mechanism for the employing agency to direct the scheduling of an IME, subject to review of the request by the Secretary of Labor.

The complementary piece of legislation that has passed the House is THE FEDERAL WORKERS COMPENSATION MODERNIZATION AND IMPROVEMENT ACT (HR 2465), which among other things would streamline the claims process for those workers who sustain a traumatic injury in a designated armed conflict zone, would permit physician assistants and nurse practitioners to certify disability for traumatic injuries and ensure that they are reimbursed for their services, and would allow the Department of Labor to verify federal employees salaries against social security administration data, all of which will modernize and streamline administration of FECA benefits.(WCxKit)


One significant industry-wide
issue that is not explicit to either piece of proposed legislation is prescription opioid abuse. Prescription opioid abuse is being addressed in most workers compensation systems by establishing controls on prescribing with the help of Pharmacy Benefit Management (PBM) programs. In the federal workers compensation system, only the Department of Labor has the authority to adjudicate claims, including those for ancillary services, which limits the employing agency’s ability to control the inappropriate use of pharmaceuticals.

Although federal agencies can, and a few do, hire PBMs to help address the efficacy and cost of prescription drugs, neither the agency nor the PBM have the authority to place any limits on prescribers or fulfillment beyond those established by OWCP, which are extremely limited. It is hard to imagine how the federal workers compensation system, which provides workers compensation coverage for almost 3 million workers, is going to be able to handle the opioid epidemic without a significant change in policy related to the use of formularies and other preventive controls applied at both the benefit level and the point-of-sale.

Authors Lisa M. Firestone, MHSA and Marianne Cloeren, MD, MPH, FACOEM provide services at Managed Care Advisors, Inc. (MCA) an innovative, woman-owned business specializing in workers' compensation, employee health benefits, disability management consulting, and full service workers compensation case management. Based in Bethesda, Maryland, MCA services customers throughout the United States and U.S. Territories. Visit the MCA’s website
Lisa M. Firestone, MHSA is the company’s president and owner and brings her 30 years plus experience to the healthcare industry. She is a recognized expert in the areas of employee benefit program development, evaluation, and strategic planning. She has been actively involved in the evolution of workers’ compensation case management and disability management programs, most recently focusing on the federal workers’ compensation and disability systems. She can be reached at
Marianne Cloeren, MD, MPH, FACOEM Medical Director of MCA where she supports the company’s federal workers’ compensation case management services, oversees quality assurance, and develops educational offerings related to disability management and evaluation. Dr. Cloeren’s experience includes managing employee health in the Veterans Administration system, serving as medical director for several companies, and as an occupational medicine physician for the Army’s Center for Health Promotion and Preventive Medicine, where her focus was federal workers’ compensation case management. She can be reached at

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

The Role of Medical Opinions in Managing Federal Workers Compensation

The federal workers’  compensation system, administered by the Department of Labor’s Office of Workers’ Compensation Programs (OWCP), works differently than state workers’ compensation systems but still offers many opportunities for obtaining medical opinions. Here is a brief primer on the rules related to obtaining medical opinions.  

1. Ask the Treating Provider for Clarification, Rationale and Notes
OWCP relies  on the treating provider of record to provide sufficient detail and rationale to enable their Claims Examiners to make claims adjudication and treatment authorization decisions. The employing agency has a right to review these notes. Exercising that right is easier if the employer routinely asks injured employees to sign an authorization for release of medical information related to the claim. 

2. Facilitate Referral for a Specialist Opinion
A common mistake  made by treating providers unfamiliar with the federal system is to state an intent to refer to a specialist in a treatment note, and hope that this will suffice to “make it so.” Unlike many state systems, in which a case manager will note this request and act on it, such automatic review and action is not part of the federal system. Support staff at the treating provider’s office should arrange referrals and may receive assistance from agency representatives.
The approved treating  provider may refer the patient to any specialist for consultation or care, without obtaining OWCP pre-authorization. An injured worker wishing to see a specialist should request this of the treating provider. As long as the specialist is a local enrolled provider, uses the diagnosis codes for the accepted condition(s) in billing and submits bills properly, payment should not be a problem. 

3. Use Agency Medical Exams
In state workers’ compensation,  the employer or insurer can usually obtain a second opinion exam from an appropriate specialist. The federal employer does not have this option. Although the employing agency may request a second opinion examination from OWCP, there is no guarantee they will grant the request. If the claimant is still on the federal agency employment rolls, the employer may refer the claimant for an Agency Medical Exam, according to Office of Personnel Management (OPM) guidelines (5 CFR 339). The Agency Medical Exam will not usually be given the same weight by the OWCP Claims Examiner as the treating provider’s opinion, but it may trigger OWCP actions such as an OWCP arranged second opinion exam. There are strict rules about setting up Agency Medical Exams.

4. Ask for Clinical Claim Reviews  
Federal agencies
 with access to in-house or contract Occupational Medicine physicians and/or nurse case managers should utilize their services to review medical documentation provided in relation to workers’ compensation claims. Reviews by clinicians can provide you with needed information and medical analysis related to causation, prognosis and return to work planning. Critical review of the medical documentation provided in relation to the claim can be used to determine whether continuation of pay should be controverted, and are useful when an agency is deciding whether to challenge a claim based on the medical facts.

Written reviews  by clinicians are also helpful in obtaining needed decisions from OWCP, including treatment authorization or referral for second opinion exams. Agency clinician correspondence with the treating provider can be invaluable in obtaining clarification of opinions, enhancing progression toward recovery, triggering decisions about maximum medical improvement, and soliciting cooperation in return to work planning.

5. Ask for DOL Second Opinions
The OWCP Claims  Examiner may decide that a second opinion examination is needed in order to obtain additional information about a claim, when the documentation coming from the treating provider is not clear or contains discrepancies. Such an exam is usually performed by an appropriate specialist, via a network contracted with DOL. These exams usually require the Claims Examiner to prepare a Statement of Accepted Facts (SOAF) for the examining physician. These exams are most often performed to determine whether surgery is needed, whether an accepted condition has resolved or reached the point of maximum medical improvement, or the degree of disability. Federal agencies should monitor the medical progress and documentation closely, and if questions arise, request a second opinion from the Claims Examiner.
It is important  to make a clear and concise justification for this action, and follow up the response. Once the second opinion exam is done, ask for a copy of the report. Clarify with the Claims Examiner the status and plans related to follow-up actions indicated by the second opinion, such as additional testing, other specialty evaluations, or obtaining a review and response from the treating provider. It is important to find out what the Claims Examiner is planning to do if the second opinion is in conflict with the treating provider’s opinion or treatment plan. The Claims Examiner may decide to obtain a “referee” exam (or IME). A referee exam is performed by an appropriate specialist who is usually under contract with the given DOL district office. Make sure you ask for the referee report, since it will often provide the basis for a return to work offer or necessary administrative decisions. (workersxzcompxzkit) 
Although the treating  provider of record is the primary source of clinical information needed by the Claims Examiner, there are other options available to federal agencies to obtain additional clinical perspective and opinions.
Work Comp Roundup welcomes as a new . . .
Guest Author:  Marianne Cloeren, MD, MPH, FACOEM is medical director of Managed Care Advisors, Inc. (MCA). Since 1997, MCA has successfully designed, implemented, and managed employee health and welfare and workers' compensation programs for large public and private corporations, and local, state and federal government entities. Our team of consultants and clinical professionals are in the business of maximizing health and productivity. Contact Dr. Cloeren at 301-469-1660;;

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

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