March 25, 1999

Mr. Chairman and Members of the Committee:

I appreciate the opportunity to appear before you to discuss the Veterans Health Administration’s Veterans Integrated Service Network’s (VISN 2/Network 2) efforts to reduce employee-on-the-job injuries and to more responsibly manage our part of the program that provides benefits to employees who are injured on the job – the Federal Employees Compensation Act program.

Network 2 had the highest lost time incident rate of any Network in the country (5.7% during the 1^st half of FY-98). In an effort to reduce and manage the Network incident rate, we established a Network OWCP Project Manager and Task Group to research the problems that we were encountering and to work with the Department of Labor (DOL) to resolve them. Through these efforts we found errors in accounting that had, a total of 67 cases reported as Lost Time cases were actually No Lost Time cases. Through these corrections and other efforts we reduced our Lost-Time Rates to 3.96 at the end of FY98.

Among the steps taken within Network 2 to better manage this program were:

An OIG audit requested by Network 2 that was conducted during 1998 at Network 2, DOL in NYC and DOL in Jacksonville, FL. found additional cases that were removed from the chargeback report, identified potential fraud cases, and identified other potential program cost reductions. For Network 2 these IG efforts resulted in savings of over $200,000.

In August, 1998 our Network OWCP manager started making weekly DOL Site-Visits to discuss such issues as discrepancies in Lost Times Claims Rate codes, status of open cases and adjudication timeframes, requests for Second Opinion Exams, requests for DOL to suspend compensations due to non-receipt of Report of Wage information from claimants, and requests for Lost of Wage Earning Capacity to be determined (resolution of many requests are currently pending).

VA and DOL needs to continue striving for more effective and efficient management of OWCP cases. Timelines on filing and adjudicating claims must be met, as well as making suitable job offers, prompt termination of compensation benefits and timely periodic review of medical residuals. Through these joint efforts and the steps that we have taken in Network 2, we hope to further improve the functioning of this program and achieve additional cost savings that can be used for medical care for veterans.