Disability benefits program for federal workers reported rife with waste

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Fraud, abuse in the federal disability program?

Doug McKelway reports

The government's program for disability benefits for federal workers is rife with waste and abuse, according to a three part series in the Washington Examiner.

The series documents many cases of apparently healthy young federal workers feasting at the disability trough. One ran marathons while collecting disability. Another hauled in  $142,000 in disability payments  for a neck injury – all while buying a boat called "Free Ride," travelling the world, doing trapeze flips on a Club Med vacation and enjoying snow skiing and scuba diving.

"For some workers, they can actually make more take-home pay by going on disability than they could if they stayed on the job, " says Mark Flatten, an investigative reporter for the Examiner.

In some cases, the disability program serves as a de facto retirement plan. Some15,000 recipients are 66 or older. Six of them are over the age of 100 - well past retirement age. FECA, the Federal Employee Compensation Act under which the federal disability program is run, lacks many of the controls that state and private sector programs have, says Flatten.

"State plans tend to have much stronger anti-fraud provisions. The federal government’s anti-fraud provisions are basically we trust the workers to tell us the truth," he says.

The FECA program pays 75% of wages for most recipients, all of it tax free. By comparison, federal retirement pay amounts to 60% of wages and it is taxed. The federal government has little incentive to crack down on abuses, because funding for all agencies - about $3 billion per year - is automatically appropriated and run through the Department of Labor.

The US Postal Service, with its legions of letter carriers, tops the list of federal disability claims at 40 percent. In a statement to Fox News Monday, the Postal Service's Inspector General said, "Workers’ comp has become an unintended retirement system. The Labor Department is not addressing these abuses and has no incentive to strike at fraud. Reform is needed."

Complicating effective oversight, the federal program does not require employing agencies to order a second opinion. The claimant can pick his own doctor.

If his claim is rejected, he can file for a different disability, as often as he likes. Senator Susan Collins of Maine has been at the forefront of pushing to close that loophole. "I’m  outraged that a program that’s intended to provide financial, medical and rehabilitation  support to injured workers instead is plagued with fraud and abuse," she told Fox News.

The Department of Labor Monday defended the disability program. It said in a statement to Fox News, "It is strongly committed to program integrity.... we disagree with the… assessment that the rate of fraud in the ECA program is high, but we consider any amount of fraud or improper payments to be unacceptable."

Rob Waldeck, a lawyer who represents federal workers in disability cases also defended the program. "Every federal worker pays into the FECA program and those who become disabled are getting benefits from the system they paid into while they served," he said.

"The vast majority of former federal workers who are receiving benefits are getting them legitimately."

The private sector has its own problems with disability claims, which have tripled since 1980. The aging of the work force, and the recession explain much of that, but so does a wider latitude in the diagnosis of depression and anxiety. Three times as many Americans claim mental disability as 30 years ago.

Click for more from the Washington Examiner.