U.S. Office of Personnel Management
Office of Merit Systems Oversight and Effectiveness
                        TABLE OF CONTENTS
I. EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . .1
II.  INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . .3
III.  WORKERS COMPENSATION STUDY RESULTS . . . . . . . . . . . .5
IV.  LABORATORY SITE INTERVENTIONS . . . . . . . . . . . . . . 11
APPENDIX A :  LABORATORY SITES . . . . . . . . . . . . . . . .A-1
                THIS PAGE LEFT INTENTIONALLY BLANK                       I. EXECUTIVE SUMMARY
During Fiscal Year (FY) 1997, the Office of the Office of Merit Systems Oversight and
Effectiveness conducted a special study to explore the premise that active interventions would
enable agencies to improve all or part of their workers compensation programs.  Fourteen
organizations voluntarily participated as test laboratory sites for the study.  We extend a
special thanks to these organizations, whose cooperation and support were critical to the
completion of this study.
The study was a follow-on to an earlier Office of Personnel Management (OPM) review of
workers compensation.  That study included a list of practices implemented at a few
installations that appeared to improve administration of workers compensation programs. 
Based on that information and a subsequent survey of the installations originally reviewed to
determine whether or not OPM recommendations for improvements had positive results,
OPM decided it would be helpful to track deliberately implemented changes. 
This study does that and reflects that targeted activities undertaken by agencies to address
workers compensation administration issues often produce meaningful benefits and savings
that far outweigh the administrative investment.  In the several test sites that tracked
savings/cost/cost avoidance, over $3 million was saved with only a marginal expenditure of
staff time and other resources.  Conceivably, a broader application of specific interventions
across the Federal government could produce savings totaling several hundred million dollars.
Specifically, the intervention results support the following conclusions.
  Focusing on prevention of specific types of injuries that occur at an installation creates an
  atmosphere of awareness that fosters increased safety, leading to fewer injuries and lower
  workers compensation costs.
  Top management leadership and support is critical to establishing the control of workers
  compensation costs as an organizational priority, particularly during periods of downsizing
  and organizational change.
  The more informed supervisors and employees are concerning workers compensation 
  procedures, the more likely an injured employee's return to work can be expedited.
  Early and sustained injury and case follow-up can be a deterrent to long-term disability
  incidents and higher workers compensation costs.
  Aggressive identification of light duty assignments is effective in returning injured
  employees to a productive state, thus reducing the likelihood of long-term disability
  claims.
  The more engaged Program Coordinators and other responsible officials are in program
  implementation and monitoring the program, the greater the payoff.
On a less positive note, the problem of inadequate cost tracking or of failing to provide that
information to appropriate management levels continues to plague efforts to sensitize
managers to the enormity of the cost of this program across the Federal government, and the
direct budget impact on the employing organization.  Managers remain unaware of the
provisions for charging back workers compensation costs and the resultant budget impact on
their organization.  The current tight budget environment presents an obvious incentive for
agencies to focus time and attention on workers compensation issues and the importance of
making the required investment of time and resources to contain costs.
Agencies wishing more information about specific interventions contained in this report may
contact OPM's Atlanta Oversight Division at (404) 331-3451.                        II.  INTRODUCTION
ENVIRONMENT
In FY 1994, OPM conducted a nationwide study at 155 Federal installations to determine the
status of the internal administration of workers compensation programs in Federal agencies. 
Some installations were conducting very effective programs while others, for a variety of
reasons, failed to take steps which could enhance the program and save money.  With $2
billion expended annually by Federal agencies in medical and compensation benefits for
workplace injuries and illnesses, this area is a prime target for administrative improvements.
In March 1996, OPM published the findings of the FY 1994 study along with an appendix
describing a number of practices which installations reported were working effectively in their
organizations.  A few installations had tracked improvements based upon those practices, but
for the most part no concrete data were available.  OPM also made recommendations for
improvements at many installations visited but had no information regarding the effectiveness
of those recommendations.
The 1994 study found that agency managers and employees tend to blame the high cost of
workers compensation on the current statutory requirements and the regulatory and
processing requirements of the Department of Labor's Office of Workers Compensation
Programs (OWCP).  Although statutory requirements will continue to siphon large amounts
of agency dollars into long term disability payments, the published findings of the 1994 study
included many ways that agencies can take positive steps to save millions of dollars currently
lost to inefficiencies within their own programs. 
OPM resurveyed all installations where recommendations had been made in the 1994 study. 
These installations were asked whether they implemented any of the recommendations and
what, if any, effect the implementations had on their program.  At 49 installations, a total of
78 recommendations were implemented and a reported 48 of those resulted in improvements. 
Results were mixed in terms of dollars saved, with half of the installations reporting a decrease
in costs, about ten percent reporting no change, and the rest reporting an increase.  In most
cases the installation had no way of determining whether the savings or additional costs were
related to the intervention or caused by some other factor.  As a result of OPM's initial study,
a bureau component of one agency decided to take a closer look at its administration of
workers compensation, implemented a number of changes, assumed workers compensation
responsibility for the bureau nationwide, and reported that in a two-year period the bureau
measured over $180 million in immediate and long-term savings.
EVALUATION PLAN
Beginning in FY 1997, as the final phase of the project, OPM undertook a joint study with a
number of volunteer installations from several different agencies to identify, implement, and
measure discreet interventions to determine to what extent various interventions actually
affected claims, cost, productivity, or return to work rates.  OPM hoped that the information
obtained could be used by other agencies to help them identify interventions that would help
lower the cost of their workers compensation programs.  Nineteen laboratory sites were
originally identified.  For a variety of reasons, several dropped out before completion of the
study; however, 14 laboratory sites implemented or attempted to initiate one or more
interventions.  The results are described in this report.
Merit Systems Oversight staff worked with each of the participating installations to ensure
that the selected interventions were in keeping with the objectives of the study, to determine
the availability of data from which to measure and compare the effects of the interventions,
and to gather and analyze the data resulting from those measures.  Measures recorded are
intended to provide information useful for each intervention.  OPM found early on that an
attempt to gather identical measures for each intervention was not feasible primarily due to
differences in the ways that agency systems attempt to capture workers compensation
information.  Data were gathered at the beginning of the project, approximately 6 months into
the study, and at the end of the one-year study.
DATA SOURCES
In addition to the measures described, OPM also conducted group interviews with supervisors
and employees at each installation where interventions were implemented.  The purpose of the
interviews was to determine what, if any, impact the intervention(s) had on the perceptions of
both groups regarding the workers compensation program.  OPM followed up with
supervisors and employees at the mid-point of the study and again at the end of the study. 
Related Central Personnel Data File information was also reviewed and OWCP provided data
on workers compensation costs by agency for comparative purposes.  OPM reviewed
literature on the subject to understand the differences between Federal and non-Federal
workers compensation programs and reviewed the information available via OWCP's Internet
web site.  Overall, OWCP was very helpful in providing data and updated information on
operational improvements as they affected this study.             III.  WORKERS COMPENSATION STUDY RESULTS
MERIT SYSTEM PRINCIPLES
This special study relates to the following merit system principle:
  Manage employees efficiently and effectively.
EXPECTED OUTCOMES
This special study was conducted based upon the following projected outcomes:
  Installations investing in improvements to the administration of workers compensation
  programs should recoup both time and money in excess of the investment.
  Employee and supervisory perceptions of workers compensation programs will change as
  a result of the laboratory site interventions.
  As a result of the study, agencies will have more accurate information to determine what
  interventions may be most effective in their environments.
  As a result of the study, agencies will be able to use lessons learned to avoid some
  potential pitfalls when implementing changes to the administration of workers
  compensation programs.
FINDINGS
The participating lab sites employed a variety of intervention techniques tailored to their
specific interests.  Generally the techniques fell into the following major categories:
  Injury Prevention
  Controlling Long-term Disabilities
  Improved Usage of Light-duty Assignments
  Improved Communications and Guidance
  Resourcing
Individual interventions are discussed in the next section.  OPM agreed not to attach the
installation name to the intervention since the purpose of the study is to evaluate the
intervention, not the installation.  This decision gave installations the ability to participate
without concern that an unsuccessful intervention might be viewed as an agency failure.  A list
of the installations participating may be found in Appendix A.
Injury Prevention
Although the most successful monetary interventions in this study appear to be those
involving returning long-term beneficiaries to work or removing those who no longer meet the
requirements for benefits, injury prevention is truly the most cost effective measure that can be
taken to reduce disability benefits.
Injury prevention is particularly important during any period of downsizing.  Preliminary
information from one agency indicates that workers compensation claims increased during
downsizing. This study was not designed to follow-up on that information, but the indications
are worthy of noting.  If that information is verified, close attention to safety and workers
compensation during such periods should be an essential part of the downsizing process. 
Long-term disability payments continue even when the installation closes and must be
absorbed by some part of the agency.
Long range prevention savings are more difficult to capture since a decline in injury rates can
only be captured for one year at a time; however, the one laboratory site concentrating on
injury prevention experienced a real downturn in rate of back injuries that will have a long
term effect.  Efforts to improve ergonomics resulted in fewer lost workdays, accidents, and
claims involving back injuries.  At Laboratory Site 8, an ergonomics team initiated activities to
inform the staff of preventive measures and also purchased special lifting devices.  This would
appear to be a worthwhile initiative for any installation where heavy lifting is part of the job.
Controlling Long-term Disabilities
In terms of current expenses, the biggest payoff is in controlling long-term disabilities.  
Laboratory Sites 1 and 2 in the same agency planned to implement the same interventions
dealing with employees on long-term disability rolls using investigative follow-up methods. 
At one laboratory site the interventions were implemented with very positive results.  The first
installation was able to remove an employee from the long-term rolls and ultimately from his
position with the installation.  The laboratory site estimated that it would ultimately save over
$1,400,000, based on the assumption of keeping the employee on the agency rolls until death. 
At the other laboratory site, the entire workers compensation operation was in a state of
transition, and the intervention was not implemented despite the fact that OWCP staff recently
identified a number of long-term recipients who may be on the rolls erroneously.
Most agencies could reduce program costs significantly by actively pursuing long-term
disability cases.  Several laboratory sites implemented actions intended to reduce the number
of employees on the long-term disability rolls.  Laboratory Site 3 implemented several actions
related to removing employees from long-term rolls and reported eight cases dropped from
the rolls.  Projected savings over time are expected to be significant.  Using the current
average rate of pay for Federal employees and the lowest possible benefits cost, this is a
savings of approximately $125,000 in one year.  Assuming most employees would live at least
an additional 15 years, this installation will save in excess of $1.8 million on these eight cases.
Laboratory Site 5 also focused attention on 20 employees on the long-term rolls.  While no
employees have been removed during the study time frame, the laboratory site has several
actions pending either to request that OWCP place these employees on the totally and
permanently disabled rolls or to bring employees back to work.  This installation anticipates
that the intervention will prove to be very beneficial in the long run.  Laboratory Site 8
implemented a similar intervention but did not have any immediate results from increased
focus on the long-term recipients.
Improved Usage of Light-duty Assignments
Physical fitness requirements and the level of approval for deviations from agency-wide policy
affected the outcome of certain interventions.  Laboratory Sites 6 and 7, both in the same
agency, chose implementations intended to permit a greater number of light duty assignments. 
Because of the need for all personnel to be able to handle emergency situations, a premium is
placed on having personnel at work and functioning to their full capabilities.  At both of the
laboratory sites accidents and injuries are closely reviewed, and employees are encouraged to
come back to work as soon as they are fully recovered.  As a result, light duty assignments
have been used very sparingly in the past.  At one of the laboratory sites, where security is
required at the highest level, they could not fully implement the intervention because of
Headquarters policy.  At the other laboratory site, where the level of security is at the medium
rather than the maximum level, they reported that Headquarters had informed them that they
could utilize light duty assignments. 
Laboratory Site 10 was able to reduce the number of days employees were on light duty
before they returned to regular duties, even though the number of employees needing light
duty assignments increased.  This laboratory site also attempted to improve their case follow-up system.  In the opinion of the Program Coordinator, these efforts resulted in returning
employees to work in some capacity more quickly  and also placing them back in their
permanent position sooner than in past years, thus contributing to containing workers
compensation costs.Improved Communications and Guidance
Organizations at all levels would benefit from tracking key workers compensation  indicators
and providing them to appropriate management officials on a systematic basis.  OPM found a
lack of uniformity in how the laboratory sites keep statistics, what statistics are kept, and the
ability of laboratory sites to provide definitive measures of savings (or losses) that resulted
from the intervention.  Accordingly, the data provided for the study reflect the best efforts of
the Program Coordinator at the installations to accommodate our requests but often do not
allow for absolute measures of results.  In some cases agencies maintain elaborate workers
compensation measures but changes in the organization made retrieving the data difficult. 
The lack of adequate statistical measures useful to agency decision-makers and the difficulty
our staff encountered in eliciting this information from the laboratory sites is worthy of note. 
Even when attempting to measure changes as a result of specific interventions, many
installations either had inadequate data bases or insufficient access to necessary data.
More guidance to program staff and to supervisors can result in improvements that are less
capturable in terms of monetary/staff savings but have an overall positive effect.  Laboratory
Sites 11 and 12 implemented interventions that involved expanded guidance.  At Laboratory
Site 11 guidance was primarily for agency staff in handling workers compensation cases.  The
site had significant success in reducing the average amount of time lost to workers
compensation injuries.  At Laboratory Site 12, the focus was on reducing the amount of time
to complete claim forms and get them to the appropriate office.  Such delays can result in
disapprovals, loss of benefits, additional claims from injured workers, or complaints about the
program and the program office.  The intervention proved successful in cutting the time of
submission by almost 50 percent.
Resourcing
Time and effort devoted to monitoring, administering, and implementing improvements to the
workers compensation program ultimately result in far greater monetary and staff savings than
the time and money invested.  In an era of tight budgets and reductions in funding
administrative functions, managers are missing an opportunity to save millions of dollars with
a relatively modest investment.  The results clearly indicate that by focusing on administration
of the workers compensation program, an agency will save more money in the long run by
avoiding injuries, bringing employees back to work in light duty positions as, at least, a
temporary measure, and intensifying efforts to ensure that only recipients who belong on the
long-term disability rolls remain there.
The amount of time available to the installation Program Coordinators to administer the
program is not always adequate and resources that might be invested in resulting
improvements to the program may have been redirected or are no longer available.  A
common thread, even among those laboratory sites with successful interventions, is that many
of the workers compensation programs are being affected by agencies' efforts to downsize
administrative functions.  As a result, many agencies and their component installations are
administering the program with fewer resources.  The results occurring from this study
demonstrate the importance of retaining an active workers  compensation/injury prevention
program and reinforce the need for management commitment to ensure that the program is
vigorously administered.
If the Program Coordinator is competent and conscientious about the workers compensation
program (and if a system which appears logical to supervisors and employees is in place),
employees and supervisors will generally perceive the organization's program in a positive
light.  In participating laboratory sites of one particular agency, the Program Coordinators at
all but one site received high praise as did the overall installation programs, despite being in
downsizing modes.  The program at the remaining site was disorganized and in a state of
major transition.  Employees and supervisors were very dissatisfied with the effort at that
installation.  It is apparent from this experience that program weaknesses can and do result in
perceptions, at least, of waste or abuse of the workers compensation program.
Other Intervention Techniques
At only two of the sites did interventions clearly result in changes in the perception of the
program on the part of supervisors or employees.  This finding does not fully support the
expected outcome that perceptions would improve.  Attitudes may change when the
interventions have been in place for longer periods; however, OPM found that perceptions are
based wholly on individual experience and are situational.  Therefore, while attitudes may
change over time, OPM concludes this expected outcome will not necessarily occur with a
successful intervention.
Laboratory Site 14 had success in recovering money where a third-party settlement is
involved.  Third party cases involve situations where employees have successfully sued an
outside party, and received a cash settlement.  The employee is entitled to keep 20 percent of
the award outright and the remaining 80 percent of the settlement payout is escrowed by
OWCP to cover medical claims resulting from the employee's injury.  OWCP is supposed to
credit part of this escrowed amount to the installation, but, according to the Program
Coordinator, credit has not always occurred for such cases at this laboratory site.  This
intervention could have wide applicability at any organization that is not currently recovering
this money from OWCP.
A second intervention at the same organization encouraged employees to register for disability
retirement to protect their future rights for this option.  There is a potential for long-term
agency savings from this option should workers compensation recipients move from the
OWCP rolls which are funded by the agency to disability retirement which does not accrue
additional direct agency costs, although there is an added burden in the retirement system.
The least successful of the implemented interventions occurred at Laboratory Site 13.  A
contractor was hired to handle workers compensation cases for the first 2 weeks following an
injury and to provide intense case management in certain appropriate situations.  The system
did not prove workable with regard to those employees located in primarily blue collar
segments of the laboratory site.  The employees contacted the contractor but did not always
inform their supervisors of the injury.  Four of the injuries not initially reported to supervisors
are being controverted.  The contract was dropped at the blue collar portion of the
organization in May 1997.  While the same problem occurred to a lesser extent in other parts
of the laboratory site, adjustments are planned and the agency is still endeavoring to make the
system work.                IV.  LABORATORY SITE INTERVENTIONS
Nineteen interventions were selected by the 14 laboratory sites.  In a few instances more than
one laboratory site chose the same intervention.  The interventions and summary of results for
each installation are as follows:
 
Laboratory Site 1
Intervention 1 - Pursuit of misdemeanor convictions of evident fraud claims
The laboratory site proposed to contract for "on call" compliance inspectors to review cases
for administrative correctness and validity of the claim.  They would coordinate inspector
activities with OWCP and the agency Inspector General (IG) investigator and forward cases
for prosecution in Federal Magistrate Court.  Conviction could possibly result in a fine, jail,
loss of Federal Employee Compensation Act benefits, and/or administrative removal of the
employee from his or her position.
This installation already had an effective workers compensation program in place.  They had a
full-time employee in the Safety Office dedicated to the Workers Compensation program. 
The Safety Office had an aggressive, proactive program to return injured employees to work
as soon as they are medically able to do so.  They have been successful in constantly
improving the workers compensation program at the installation since taking the program
over from Civilian Personnel.  They were able to assume control of the program during the
major agency Human Resource function reorganization and leaving the function with the
Safety Office occurred in lieu of transferring it to the consolidated personnel office located at
a remote location.  The Program Coordinator is fully responsive to the needs of the office's
clients as indicated in the employee and supervisory group interviews.  In the opinion of the
Program Coordinator, it is highly unlikely that transferring the function to a remote site would
have resulted in nearly as much attention paid (and resulting successes) to the program as has
occurred under local control.
In FY 1996, at this installation of 3,000, 4.1 percent of employees filed workers compensation
claims.  The installation controverted (an action in which the installation disagrees with a
OWCP determination) 7 cases of which 6 were successful.  Twenty-seven employees were on
workers compensation during the period, and those employees missed a total of 378 days. 
Chargebacks (the amount the Department of Labor billed the installation for its OWCP
expenses) came to $1,076,924 during FY 1996.Results
The installation used contract investigators to review case files and pursue fraudulent claims. 
One workers compensation recipient did plead guilty to fraud and was removed  from his
position and the workers compensation rolls.  The site also successfully controverted six cases
during the year.  The removal action was publicized via the employee newspaper as a
deterrent to other employees who may be tempted to abuse the system.
This action had major impact.  The Program Coordinator indicated that:  1) fewer claims were
filed as a result of publicity about the prosecution; 2) there has been less escalation from minor
to major injuries during the year; and 3) cost savings from terminating the one employee are
calculated at $1,447,680.00 (based on the assumption that the beneficiary would otherwise
have remained on the agency rolls in receipt of compensation and benefits until his death). 
Overall, according to the Program Coordinator, the number of injuries or occupational illness
claims, the number of employees on Continuation of Pay (COP), and the number of COP days
used all decreased significantly at this installation in FY 1997 compared to FY 1996.
Intervention 2 - Begin home visits
The activity decided to begin home visits by the program administrator, occupational health
nurse, and compliance inspector to evaluate potential for return to employment, valid status of
the employee, and potential abuse of benefits.
Results
The site incurred a delay in implementing the second intervention until mid-year.  However,
two visits have been made to long-term workers compensation employees.  The two visits
revealed that the employees may be running home businesses and there will be further follow-up on these employees.  There were no statistics concerning this intervention at the end of the
study period.  Costs were limited to the time of the individuals who conducted the home
visits; however, savings will be quite substantial if fraud and abuse is confirmed.
Laboratory Site 2
Intervention 1 - Pursue fraudulent claims
This organization planned to implement the same interventions as the first laboratory site in
the study. They proposed to contract "on call" compliance inspectors to review cases for
administrative correctness and validity, and to coordinate inspector activities with both OWCP
and the IG investigator.  They also intended to present cases for prosecution in Federal
Magistrate Court.  Conviction could result in fine, possible jail, loss of benefits and  removal
from the service.
This installation of 5,000 employees computed an FY 1996 claim rate of 33.7 percent.  Over
25 percent of the workforce (1,321 employees) was out with a workplace injury or illness at
some time during the year and those employees missed a total of 4,112 days.  Chargebacks
came to $1,319,369.
Intervention 2 - Conduct home visits
This installation also planned to begin home visits by the program administrator, occupational
health nurse, and compliance inspector to evaluate potential for return to employment, valid
status of employee, and potential abuse of benefit.
Results
Neither of the interventions was implemented and the activity was unable to provide any
indicators at the end of the study.
Representatives from the Jacksonville, Florida OWCP visited the activity October 28-30, 1997
and conducted training for managers and personnelists.  The training covered such topics as
the role of OWCP, role and responsibility of the supervisor, vocational rehabilitation,
returning employees to work, and benefits under FECA.  OWCP officials conducted several
house visits and determined that a number of employees should return to work and be taken
off OWCP rolls.  OWCP is in the process of working with the activity to find jobs for these
individuals.
Based on comments from the Program Coordinator, the fiscal and human resources to
implement the interventions were not available.  The installation still would like to keep
implementation of the interventions as a goal; however, the facility has different priorities at
this time.  It is apparent that this program is in disarray without sufficient resources or
apparent interest to reduce the monies being spent unnecessarily on workers compensation. 
Without OWCP's direct intervention, several cases would have remained on benefits rolls
indefinitely.Laboratory Site 3
Intervention - Offer suitable jobs to long-term disability cases when possible
The intent of the selected intervention was to engage in a short-term intensive effort using a
team approach to make suitable job offers to all long-term disabled who are still employable. 
This short-term focus is intended to decrease program costs and take advantage of resources
that may not be available during and after the FY 97 installation reduction in force. The long-term intent of this intervention is to institutionalize a continuing process that can be
maintained with more limited resources.
Approaches included establishing a current profile of the employees on long-term disability to
clarify what they are qualified to do within their current medical restrictions, matching abilities
against existing vacancies, and restructuring positions wherever possible and appropriate.
During FY 1996, this installation of 2,100 computed a claim rate of 4.5 percent.  The
installation did not attempt to controvert any cases and was not able to provide data on the
number of employees who lost work days or the number of days lost.  Chargebacks came to
$846,349. 
Results
The laboratory site reported realized savings for the period of December 1996 through July
1997 resulting from the intervention process as $191,972.  This resulted from eight cases
involving long-term disability recipients being dropped from OWCP rolls.  The dropped cases
were comprised of:
  one employee who opted for voluntary retirement;
  one employee who opted for disability retirement;
  three employees who refused to accept positions within their physical limitations;
  one temporary employee who was found to be recovered by the treating physician; and
  two employees who were reemployed.
Not all savings will be realized immediately, but the results represent significant savings by the
installation over the long-term, estimated at close to $2 million.  As a corollary result,
management awareness of workers compensation programs increased.Laboratory Site 4
Intervention - Improve the use of light duty assignments
The installation intended to compile an installation-wide inventory of light duty assignments,
with the help of managers and supervisors, so that all injured employees may quickly be
restored to productive work.  The plan called for the installation head to sign a policy memo
requiring injured workers, except those confined to bed rest, to return to work on a limited
basis, as soon as possible.  The light duty assignments would be customized to suit individual
cases and be approved by the diagnosing physician.
Results
Because of other priorities, the installation was unable to implement the proposed intervention
or provide data on key indicators of the OWCP program.  The personnel staff has been
depleted in anticipation of the regionalization that was scheduled in September 1997, and
impacted staff are actively seeking employment elsewhere.  Although the installation
recognizes the importance of the program, taking the steps necessary to implement the
intervention was placed on a lower priority.  The activity still intends to activate the
intervention and expects to achieve cost reductions as a consequence.
Laboratory Site 5
Intervention - Use home visits to assist employees in recovery
As a part of the overall agency interest in reviewing cases where employees are on long-term
disability rolls, the installation focused attention on this group by using home visits to identify
those employees who could be returned to work in some capacity.  Once employees were
identified, the Program Coordinator was tasked with working with management to find a
suitable position to offer each employee.
This installation of 7,500 had 34 employees on the long-term disability rolls and chargebacks
came to $422,863 in FY 1996.
Results
In February 1997, a special committee was established to work on the planned intervention
and supplement the work of the Program Coordinator.  It identified and targeted 20
employees on the long-term rolls for return to duty in some capacity.  Some of these
employees were contacted through the home visit program and others were identified by a
review of records.
Some positive results have occurred as a result of the intervention.  Although no one has yet
been brought back to work, the installation has made a request to OWCP to place some of the
targeted employees on the totally and permanently disabled rolls, and, at the end of the study,
an offer for a light duty assignment was about to be made to one temporary employee who
was injured on the job.  The committee continues to meet once a week and facilitates the
management of current cases.
According to the Program Coordinator, this focused attention has had a positive impact on
the program, primarily by increasing the timeliness in the submission of the original injury
paperwork.  It has also involved affected supervisors directly in the process of tracking the
injured employees and encouraging the employees' return to work as soon as they are
medically able to do so.  In addition, the committee has taken steps to controvert cases where
warranted, although they have not always been successful.  They have also continued to make
home visits and plan to continue to bring closure to appropriate long-term cases.
Laboratory Site 6
Intervention - Improve contacts with the attending physician
The installation decided to develop a letter to treating physicians requesting detailed
information on the limitations placed on the affected employee as a result of the injury, the
types of duties the employee could perform, and the anticipated length of recuperation.  The
Workers Compensation Intervention Nurse and the Safety Office were to identify candidates
on a case by case basis.  The goal of the letter was to return employees to work and minimize
lost days.
The intent of the intervention was to determine what types of duties an employee could 
perform and if any positions at the facility exist where the employee could work without
jeopardizing his or her safety or the safety of his or her co-workers.  The installation hoped to
get supervisors more actively involved in the process and to pursue all available options to get
the employee back to work as soon as possible.
This installation of 750 employees computed an FY 1996 claim rate of 7.5 percent.  The
installation did not attempt to controvert any cases.  Thirty-one employees were out on
workers compensation during the year, and those employees missed a total of 378 days. 
Chargeback information was not available.Results
The institution did not implement the intervention or initiate the physician's letter as a result of
the agency headquarters' determination that the facility (which must provide maximum
security due to the nature of its mission) could not offer limited or light duty positions within
most parts of the installation.
Statistics for the period from FY 1997 compared to FY 1996 indicate a small increase in total
injuries, lost time, and costs for FY 1997.  These figures still appear to be comparatively low
considering the nature of the work done at the installation and the fact that the institutional
policy will not permit employees to return to work until fully recovered and able to perform
the full scope of their duties.
Table 1
FY 1996
FY 1997
Total Injuries
53
56
    With Lost Time
31
37
    With No Lost Time
22
19
Cost of Lost Time
$42,324
$60,544
According to the Program Coordinator in the Safety Office, none of the lost time injuries
during the pilot period met the criteria for expediting the employee's return to work.  In order
to meet the criteria, medical evidence must support a light duty assignment and the
department must be able to accommodate a person on light duty.  Over 50 percent of the lost
time injuries occurred to employees assigned to positions and organizations within that
portion of the facility requiring a fully operative employee.  The other injuries did not lend
themselves to the intervention.  The Safety Office will continue to evaluate the possibility of
exercising this option on a case by case basis.
Also, according to the Program Coordinator, until there is a change in institutional philosophy
from the Headquarters level to permit wider latitude to the local institution to offer light duty
work to appropriate injured employees, they will not be able to implement the physician's
letter proposal or formalize light duty procedures, policies, and positions.Laboratory Site 7
Intervention - Pursue Light Duty Assignments
Because of safety concerns, the installation had been operating under a long-standing policy of
not returning injured workers to the job until they were fully physically able to perform their
duties.  As a result, costs for injuries were high because employees had to stay home for
extended periods of time.  A recent change in agency policy permits establishing limited-duty
posts in certain locations within the facility.  This change forms the basis for the planned
intervention.  The Program Coordinator hopes to reduce overall program costs by returning
employees to light duty assignments instead of waiting until they are fully recovered and can
return to their regular posts.  The Program Coordinator was to identify a pool of possible
limited duty posts requiring no direct contact with dangerous individuals, which could be used
to return injured employees to duty.  The new policy, communicated through a procedural
memorandum, required each limited duty assignment to be a joint effort with the employee,
his or her doctor, the supervisor, and the Program Coordinator.
This installation of 290 employees had 14 employees out on workers compensation during FY
1996, and those employees missed a total of 246 days.  Only one employee returned to a light-duty assignment during that year.  Chargebacks came to $80,885. 
Results
On March 17, 1997, the installation head issued a memorandum to all department heads at the
institution that outlined the new policy changing the previous approach.  The new policy had
union concurrence and fully outlined steps to be followed in bringing workers back before
they physically able to perform their regular duties.  At the union's request, the policy was
extended to include employees who were injured off-the-job. 
The policy has not yet resulted in light duty assignments for employees with work-related
injuries, because the few injuries that occurred since the policy was issued were minor and not
serious enough to require more than a few days away from the job.  All employees returned to
work fully physically able to perform their full range of duties.
However, during the fourth quarter, five employees who were injured outside of work were
able to take advantage of the new policy.  All five were employees who suffered broken limbs,
sprained muscles, or torn ligaments and would have been absent from work for weeks or
months under the previous policy.  Because they were permitted to return to limited-duty
assignments, they were able to avoid the use of approximately 720 hours of sick leave. 
Further, the institution saved an estimated $17,280 in what would have been overtime costs to
fill behind those injured employees.
The intervention is considered by the Program Coordinator to be a success.  Employees are
able to return to work sooner, supervisors and managers are able to get work done by using
partially recovered employees to fill actual positions performing necessary work, and overtime
costs are avoided.  Presumably, as future on-the-job injuries occur, the facility will realize
significant savings in medical costs, Continuation of Pay costs, and avoidance of overtime
costs, accomplished without any diminution of employee safety.
Laboratory Site 8
Intervention 1 - Aggressively investigate and review claims
Claims were to be reviewed by an Accident Review Board and referred for follow up by the
IG if claims appeared suspicious.  The Personnel Officer and the Program Coordinator
indicated they did not anticipate that a large number of cases would be found to be
suspicious most likely about 5 percent.  In those cases they would make use of the IG Pilot
Project in which 9 installations are sharing the cost of an IG office.  In suspicious cases, they
anticipated removing employees from the workers compensation rolls by returning them to
work or removing them from employment if the employees were unwilling to return.
Results
Representatives of the IG's office visited the installation and reviewed the cases in question
but did not choose to pursue any individual cases.  While no employees were removed from
the compensation rolls as a result of this review, it is intended that further reviews will be
made at a later date.
Intervention 2 - Concentrate efforts to improve ergonomics in an area of the
facility where lifting injuries occur frequently
The second intervention made use of the agency's ergonomics experts already in place to
work on a particular problem area within the installation where lifting accidents occurred
frequently.  Program officials anticipated that, with application of techniques and devices
recommended by ergonomics experts, many of these accidents could be prevented.
Results
The Accident Review Board, the Ergonomic Team, and the newly assigned agency OWCP
Liaison all worked on this intervention.  The Accident Review Board added a member from
the unit with the high rate of injuries to the group, and the Ergonomic Team initiated a
number of efforts to improve their staffs' physical capabilities and knowledge of lifting and
movement.  The organization was also able to purchase special lifting devices designed to
minimize back injuries.  The initial costs included $240 for the 12 hours spent by an
ergonomics expert studying the situation and $33,889 for the 7 special lifting devices.
These actions led to a significant reduction in such injuries compared to the same time frame
in FY 1996.  Specifically, during FY 1997 there were 9 fewer lost-workday claims involving
back injuries, reducing the cost of these injuries by $15,967.00 over just this one year period.
Laboratory Site 9
Intervention - Utilize the Employee Assistance Program (EAP) counselor as a
liaison with injured workers 
The purpose of the intervention was to provide face-to-face liaison between the installation
and injured workers during their time away from work in order to facilitate their return to
work and to improve employee perceptions that the installation cares about them.
Theoretically, personal contact with injured workers helps them feel needed and speeds their
return to work.
Results
The installation has not implemented this intervention.  The facility's point of contact
indicated that the new installation head is not willing to utilize the EAP in this way.  During
the course of the year, OPM suggested that the Program Coordinator contact OWCP for
guidance on the legal and regulatory implications of the intervention; however, the manager
believes use of the EAP could be construed as harassment and is not interested in pursuing the
intervention.  As a result, the intervention to use EAP resources is unlikely ever to be
implemented at this facility.
Laboratory Site 10
Intervention 1 - Implement a more aggressive light duty program  
The activity planned to form an action team to address light duty issues to improve local
program efficiency returning employees to light duty as quickly as they were able and
returning employees to regular duties on a part-time or full time basis as soon as recovery
permitted.Results
The number of light duty assignments increased from six to eight, while the total number of
light duty days decreased from 145 to 112 in FY 1997.  The graphic illustration below
highlights the positive accomplishments by this installation in reducing light duty days.
In addition, the installation successfully returned an employee to regular duty but on a part-time basis.  The staff member worked part-time, 4 hours per day, while recovering from carpal
tunnel surgery.  The employee is now recovered and returned to work full time.  Without
implementation of this intervention, the employee would have remained on workers
compensation until fully recovered.
The combination of making positive efforts to assist employees to get back to work and
providing light duty work increased productivity over the fiscal year.  As was anticipated,
added management attention to the light duty program and follow-up with employees
contributed to containing the number of days lost while the number of employees off work
increased by 33 percent during the year.  Cost avoidance is difficult to estimate with only one
year of experience to measure; however, the figures appear to support a positive outcome
both in terms of regular and light duty work days.  Cost was limited to the staff time devoted
to the action team.
Intervention 2 - Initiate early case follow up
This intervention was designed to begin early case follow-up by local program officials to
express care, obtain employee status, and develop a rapport with injured employees.  Early
attention to the injured worker's needs and prognosis are believed to speed the employee's
return to work and assist in the identification of possible temporary assignments or necessary
work adaptations.  Additionally, early attention to each case could identify those situations
where cases might properly be controverted.
Results
One controversion of a stress illness case was successful in FY 1996.  The case was pending
at the time of the initial visit.  No other cases have been controverted this past fiscal year.  In
FY 1996, there were 24 on the job injuries for which claims were filed.  In FY 1997, 27 on-the-job injuries resulted in claims.  In FY 1997, one occupational disease case was approved
compared to two cases in FY 1996.
The following table shows the workers compensation costs for medical and compensation
costs, COP costs, and work days lost/number of employees.
Table 2
Compensation
COP
Medical
Days
Lost/Emp
FY 1996
$4,851
$  6,922
$12,838
57/12
FY 1997
$6,754
$10,414
$15,329
57/16
The Program Coordinator noted that even though all FY 1997 costs are higher; 39 percent of
medical costs, 64 percent of compensation costs, and 71 percent of the COP costs, were
related to injuries off the premises.  One very serious injury occurred at their training facility
for new employees.  Two other staff were involved in a serious motor vehicle accident as
passengers in a vehicle making an airport pickup.  Without these three injuries,  costs would
have been below FY 1996 figures.Laboratory Site 11
Intervention - Implement a Workers Compensation guide to facilitate
communication among agency staff, employees, and health care providers
The goal of the intervention was to reduce time lost as a result of injuries, the thesis being that
at least some of the lost time was attributable not to the injury itself but to inefficiencies
created when the parties involved were unsure of the requirements for making and approving
an injury claim.  The guide features the following steps for benefits staff to use in managing
traumatic injury cases.
  1. Memos to supervisor
  2. Memos and letters to claimants
  3. Letters to OWCP
  4. Letters to physician
  5. Memos to timekeeper
  6. Case file forms
  7. Agency workers compensation contacts
  8. Official policy statements on return to limited duty
Results
Productivity increases or decreases
   
  1996 Days of lost work - 823
  1996 New cases - 48
  Average days per case of lost time - 17.1
Statistics cover the first 6 months of 1997
  1997 Days of lost work - 269
  1997 New cases - 33
  Average days per case of lost time - 8.15
No external costs were  attributed or budgeted for production and compilation of the material
in the agency Workers Compensation Guide.  The only cost was staff time used in preparation
of the intervention which was estimated to be about .25 of a staff year.
Implementation occurred very smoothly and in an organized manner.  The most frequent
instruments used were the standardized memos and letters to claimants, supervisors, and
doctors.  Also, a case chronologic log was used for all new cases.
The goal was to reduce the amount of time lost by employees due to injuries.  Thus, they
would increase workforce effectiveness and, at the same time, lower the costs associated with
COP claims.  While the Program Coordinator did not note any changes in costs or reductions
in claims for the first 6 months of 1997, a noticeable drop occurred in the number of days
missed by injured employees.  The average number of days lost from injuries in 1996 was 17.1
days.  As indicated by Chart 2 more than a 50 percent drop in the average amount of time lost
occurred in the first half of 1997.
                                                          Chart 2
In addition, the Program Coordinator noted that the claimants and supervisors are more
informed from the beginning of the claim, and both groups are more aware of their
responsibilities under the program.  In general, employees and supervisors indicated that they
now clearly understand that two agencies are involved in case management their agency and
OWCP.
Laboratory Site 12
Intervention - Disseminate a memo from the agency Director and a new
brochure for supervisors
The goal of this intervention was to reduce lost work days by increasing publicity about the
workers compensation program.  The Workers Compensation Brochure for supervisors was
designed to serve as a guide to expedite communication between workers compensation staff
and supervisors of injured employees.  Washington Headquarters was selected as the primary
site for the increased publicity because it was the source of the majority of new cases initiated
during the year.  The brochure provides the following information for supervisors:
  1. Simple guidelines for responding to a claim
  2. Charging time loss
  3. Filing a claim
  4. Recurrences
  5. Traumatic injuries
  6. Occupational illnesses
Results
The agency clearly accomplished efforts to intensify publicity regarding its workers
compensation program while reducing lost work days.  The publicity effort included an all
employee memo from the Director emphasizing the importance of the workers compensation
program and the responsibilities of the supervisor and employee, video messages in
Washington DC, briefings for managers and supervisors, and distribution of a new pamphlet
to the larger organizations in the agency.  One additional effort included a message on the
"pay stub" for all employees, along with an article in the agency newsletter.  Future efforts
planned beyond this study include a revised chapter in the agency administrative handbook for
managers.
Return to work is faster and cost reduced 
  
Average Number of days from injury to submission of CA-1 (all cases)
  Initial   25.8 days (1996)
  Mid-term  22.0 days (2/97-5/97)
  Final     13.2 days (6/97-9/97)
Average Number of days from injury to submission of CA-1 for COP cases
  Initial   19.4 days
  Mid-term  24.1 days
  Final     13.0 days
Average Number of days of COP used (lost work days)
  Initial   18.0 days
  Mid-term   4.9 days
  Final      7.1 days
The cost of increasing publicity was minimized by using internal communication channels
already established.  The cost was not tabulated, but amounted only to staff time and paper
used for dissemination purposes.
The laboratory site's primary goal was to attain more timely submission of workers
compensation claims forms (the CA-1).  Since last year, significant reductions occurred in the
amount of time needed to complete and return the form to the appropriate office (see below). 
The amount of time from the employee's injury to the date a CA-1 form was received in the
benefits office dropped nearly 50 percent, from 25.8 days to 13.2 days.  It is important to note
that other factors can affect this indicator, but improved communication resulting from the
intervention clearly affected this outcome.
Laboratory Site 13
Intervention - Use a contractor to provide 24-hour claim service to employees
The goal of this intervention was to process cases as quickly as possible, with the intent that
faster processing would enable injured workers to return to work more quickly.  The agency
proposed contracting with a company to provide phone service staffed with medical
technicians 24 hours a day, 7 days a week to fill out the appropriate workers compensation
forms for injured workers.  The company handles cases for the first two weeks following an
injury and provides more intense case management during that time frame, if appropriate.
Results
This office has had serious problems with the intervention.  Overall, the majority of the
employees are white collar; however, a part of the organization consists of virtually all blue
collar employees.
The Program Coordinator indicated that the contract was funded centrally and estimated that
the office spent about $1,700 of the total of $25,000 budgeted nationwide.  About 25 claims
were submitted using the contractor.  Almost all of these claims were from the primarily blue-collar operation.  In about one-half these cases, the injured employee called the 1-800 number
to report an injury, sometimes days after the alleged occurrence, but failed to inform his or her
supervisor of the injury.  The supervisor did not know of the injury until the CA-1 appeared
via fax.  Four of these injury claims are being controverted.  In one of these cases the
employee injured his finger, stayed at work that day, came to work the next two days, and
then called the contractor to report the injury.  Supervisors at the blue collar operation wanted
the contract canceled.  The local Program Coordinator was spending much of her time either
in clarifying information on the CA-1 or assisting the supervisors in controverting cases and
agreed that the service was only lengthening and confusing the process.  As a result, use of the
contractor was dropped at the blue collar operation in May 1997.  The contractor continues to
be used in the rest of the offices under the installation's jurisdiction, with some of the same
problems, primarily concerning specificity.  For instance, CA-1 forms often are filled out with
the location of the accident vaguely stated such as, "next to the elevator," with nothing further
such as the floor, the building, the city or the state in which the accident took place.
With regard to the use of case management, the outcome has been better.  In those cases
where nurses have worked with the employee and his or her physician, the results in returning
the employee to work quickly have been good.  The contract currently calls for the contractor
to decide whether their intervention in case management is warranted beyond the first 2
weeks.  Unfortunately, sometimes the information needed to enable the contractor to decide
to intervene is not provided by the employee to the contractor or the installation.  If the
contract can be modified so that the installation can request the contractor's involvement, the
Program Coordinator believes that the process would be significantly improved.  Such a
change is expected to be explored during future contract negotiations.  Despite the initial
problems, the agency's headquarters is anticipating initiating the pilot project in other
locations, once the improvements to the process have been finalized.
Laboratory Site 14
Intervention 1 - Reduce workers compensation costs by pursuing appropriate
third party settlement money
In cases where employees have successfully sued manufacturers; e.g., in asbestos cases, and
received a cash settlement, the employee is entitled to keep 20 percent of the award outright. 
The remaining 80 percent of the settlement payout is escrowed by OWCP to cover medical
claims resulting from the employee's injury.  OWCP is supposed to credit part of this
escrowed amount to the installation, but the Program Coordinator reported that this
frequently is overlooked in the process.  The installation decided to contact the injured
employees and request their permission to receive information on the terms of the settlement. 
With this information, the installation contacted OWCP and asked for credit for part of the
settlement to reduce the installation's compensation costs.
Most third-party cases at this activity involve asbestos claims.  Chargebacks on third party
claims at the installation amount to over $2 million annually.  The Benefits Office designed
information and release forms that permitted them to pursue the money due the activity.  A
form letter was routinely sent to each employee with a third party claim, explaining the
process and asking for the employee's consent to pursue the funds.  Attached to the letter are
the privacy release form to obtain information from the employee's attorney and a form asking
for pertinent information about the claim.
Results
At mid-point in the study (the latest figures available), the activity had pursued 68 of 121 third
party claims.  Of those, 21 cases resulted in a recovery of $45,331 ($39,502 in medical
expenses, $5,829 in monetary costs).  Although this agency maintains elaborate statistics on
workers compensation, the location of that information was changed to a remote facility
during the course of the study.  As a result, the installation was unable to access the data for
OPM to determine the final result; however, based on the number of cases being pursued and
the rate of return during the first part of the study, OPM estimates that the total amount
recovered for FY 1997 should be approximately $100,000.
Cost of implementation has been minimal.  The cost for designing, producing, and mailing the
forms is estimated at under one dollar per employee.  Staff time processing the information is
less than 10 minutes, or less than $200 to process the 68 recoveries.  This is a rate of return of
$500 for each dollar expended.
The third party recovery intervention works well and could be applied anywhere this type of
claim occurs.  The most likely uses would be in industrial settings or where employees work at
non-Federal sites, and are more likely to be injured as a result of third party negligence. 
Implementation is inexpensive and Program Coordinators could have the forms on hand for
distribution.
Intervention 2 - Encourage employees to register for disability retirement, if
appropriate
This intervention protects an employee's future eligibility for this option.  Employees who are
separated from the installation's rolls as the result of a permanent disability from an on-the-job
injury have a one-year period after their separation to apply for disability retirement.  In the
past, employees may not have been fully aware of this time limit or may not have understood
its implication.  Additionally, employees who recover sufficiently to return to work in some
capacity but are not able to perform their former positions may prefer to apply for disability
retirement.  The installation wanted to ensure that all injured workers in either category were
aware of the importance of this action to their future.  While electing to apply for disability
retirement in lieu of workers compensation is not appropriate for all injured employees, those
who do make the change will help to reduce the installation's workers compensation bill.
However, it should be noted that this local cost reduction is at the expense of the overall
retirement cost to the government.
The activity decided to emphasize this option during counseling in the first year of workers
compensation, ensuring that employees understand the differences between the two programs
and the advantages of registering before the one-year eligibility lapses.  
Results
One employee opted for disability retirement.  Thus, the costs will accrue to the disability
retirement fund rather than appearing as a chargeback to the agency through workers
compensation.  Its most useful benefits are 1) providing employees with an option they might
unknowingly lose through lack of information, and 2) getting the employee off the agency's
rolls before they can become a long-term case management problem.  Costs were negligible,
as the counseling was already in place.  Only the recommendation to register for disability
retirement, with an explanation of the advantages of doing so, was added.  The explanation
takes only a few minutes per employee.
This intervention is inexpensive and could result in improved employee morale by providing a
caring alternative to employees who might not fully understand their options.                  APPENDIX A :  LABORATORY SITES
Department of Agriculture
National Finance Center
New Orleans, Louisiana
Department of the Army
Aberdeen Proving Ground
Maryland
Fort Bragg
North Carolina
Fort McPherson
Georgia
Fort Rucker
Alabama
West Point Military Academy
New York
General Services Administration
General Services Administration 
Philadelphia, Pennsylvania
Department of Health and Human Services
Food and Drug Administration
Rockville, Maryland
Department of Justice - Bureau of Prisons
Federal Correctional Institution
Raybrook, New York
Federal Medical Center
Rochester, Minnesota
U.S. Penitentiary
Atlanta, Georgia
Department of Navy
Norfolk Naval Shipyard
Virginia
U.S. Office of Personnel Management
U.S. Office of Personnel Management
Washington, DC
     
Department of Veterans Affairs
Veteran Affairs Medical Center
Decatur, Georgia