SMITH JENKINS, JR.
DIRECTOR, VA DESERT PACIFIC HEALTHCARE NETWORK (VETERANS INTEGRATED SERVICE NETWORK 22)
THE WORKERS' COMPENSATION PROGRAM
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
COMMITTEE ON VETERANS' AFFAIRS
U. S. HOUSE OF REPRESENTATIVES
March 25, 1999
Mr. Chairman and Members of the Subcommittee:
I appreciate the opportunity to appear before you to discuss the efforts of the Veterans Health Administration’s Veterans Integrated Service Network 22 to improve management of the Workers’ Compensation Program and reduce unnecessary costs.
Until about six years ago, VA Headquarters (HQ) paid all the Office of Workers' Compensation Program (OWCP) costs for the Department of Veterans Affairs. In an effort to better control, and possibly reduce, the continually escalating costs associated with the program, HQ decentralized the funds and responsibility for the OWCP program to each of the separate Administrations within the Department, and ultimately to the various field organizations and facilities.
Cumulatively the facilities in the VA Desert Pacific Healthcare Network (i.e., Veterans Integrated Service Network (VISN 22), have historically had the highest level of OWPC costs in the country, far surpassing any other VISN. In Chargeback Year (CBY) 1995 (July 1, 1994 - June 30, 1995), the cumulative amount of OWCP cost in the facilities that now comprise VISN 22 was slightly over $13.4 mil. It was apparent action was required to reduce these costs.
Two VISN 22 facilities created separate, dedicated OWCP Coordinators, which were both Registered Nurses. The other VISN 22 facilities empowered Human Resources Specialists to assume primary responsibility for the various facets of the OWCP program. Additional support personnel were also provided at most facilities. It soon became obvious that good case management was the key to reducing both compensation costs and lost workdays.
Some of the specific problems identified by the OWCP staffs, which were contributing to our high OWCP costs were as follows:
Several actions were then implemented to address many of these identified problems, while being sensitive to employees with work-related injuries who legitimately needed to avail themselves of this program. In CBY 1998 (7/1/97 - 6/30/98), the cumulative amount of OWCP costs in VISN 22 had dropped to approximately $12.0 Mil., which reflects a reduction of 10.5%. Annualizing the OWCP costs experienced in the first half of CBY 1999 (7/1/98 - 12/31/98), amounts to a total projected CBY ’99 OWCP cost figure of $11.5 Mil., which would equate to a 14.2% reduction from CBY ’95. Some of the specific strategies implemented in VISN 22 to lower OWCP costs are as follows:
During the past year, VISN 22 has worked closely with the Office of the Inspector General (OIG), reviewing various aspects of the workers' compensation program. The primary focus was to identify "best practices", to develop an OWCP handbook to improve case management, and in turn, reduce compensation costs. Another facet of the work with the OIG involved the development of an algorithm to facilitate the identification of potential cases of OWCP fraud (e.g., dual compensation situations, where individuals who where considered to be "totally disabled" and were receiving OWCP payments were also gainfully employed, and in some instances were performing the same duties for which they were being compensated). Another component of this was to also actually "test" the algorithm, and pursue investigation where indicated. As a result of this cooperative effort with the OIG, the OWCP Coordinator at VAMC Long Beach received the first ever Inspector General’s Contribution Award given to a VHA employee.
We are making every effort to provide a safe and healthy work environment and offer programs on accident prevention, but occasionally, accidents will happen and our staff will continue to manage each case individually and establish light duty positions for employees, where possible.
This concludes my statement. I will be pleased to respond to questions from the Committee.