A stack of paperwork

Surge of workers' comp claims could impact processing

Effects of the COVID-19 pandemic are expected to slow claims processing at the Division of Federal Employees' Compensation (DEFC), according to a July 6 audit of the Office of Workers’ Compensation Programs by the Labor Department’s Office of Inspector General.

DFEC administers claims filed under the Federal Employees’ Compensation Act, which provides workers' compensation coverage to approximately 2.6 million federal and postal workers for work-related injuries and diseases. Federal employees who develop COVID-19 while performing their federal duties are entitled to workers compensation coverage under FECA, according to the Labor Department.

As of June 16, DFEC had received 2,866 COVID-19 claims, including 48 death claims, and paid out approximately $30,000 in medical benefits and compensation. The division estimates it will receive 6,000 COVID claims through Aug. 4, straining resources and delaying claims processing delays.

According to the IG, claims processing at DFEC may be delayed because of the Social Security Administration’s inability to process requests for Federal Employees Retirement System Offset Calculations because the paper-based process requires in-office staff. SSA told DFEC it would begin processing FERS Offset Calculation requests on June 22, but as of June 25, DFEC had not yet received any responses, the IG said.

To prepare to meet these challenges, DFEC developed a contingency plan, issued new procedures for handling COVID-19 claims and created a COVID-19 task force to oversee claims development and adjudication.

As part of its contingency plan, DEFC will dedicate two Medical Benefit Examiner teams – reassigning two of four examiner units focusing on opioid cases -- to COVID-19 claims to ensure greater consistency and oversight.  DEFC will provide those detailees with COVID-specific adjudication training. DFEC officials told the IG they have additional staffing options if the two COVID-19 MBE units are unable to handle the volume of claims.

To streamline processing for COVID-infected federal employees in high-risk positions, DFEC will accept that the exposure to the virus “was proximately caused by the nature of the employment and will only require medical evidence that establishes a diagnosis of COVID-19, such as a positive COVID-19 test result,” the report said. COVID-related claims filed by employees in positions not considered high-risk will be treated the same as all other FECA claims, DFEC said, meaning claimants must provide evidence that the disease was employment-related.

To help claimants work within social distance limitations, DFEC had provided 30-day extensions to those having trouble collecting medical evidence and deferred some second-opinion requirements. However, it will now only grant extensions and deferments for special circumstances to limit delays in processing non-COVID cases.

A task force has been established to support claims examiners and ensure COVID-19 claims are handled quickly and fairly.

The IG recommended that DFEC continue to monitor non-COVID claims for delays and other impacts, especially related to opioid claims processing. It should also closely monitor any delays that occur in requesting FERS Offset Calculations from SSA that might result in potential benefit overpayments to claimants as well as the impact a backlog could have on DFEC’s ability to timely process claims.

Read the full report here.

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