Improvements Needed in Federal Employees' Compensation Program

The Federal Employees' Compensation Act provides for two types of disability payments--monthly payments for loss of wages for as long as the disability continues, and scheduled awards for certain permanent disabilities. The Federal Employees' Compensation Program has grown substantially since 1970 and, if benefit payments continue to increase at the same rate, annual benefit costs will reach $1 billion by 1980. A review of the program revealed that: benefits were awarded without a showing of causal relation between the employee's disability or death and his or her employment; there was ineffective monitoring of disability status and the need for rehabilitation of employees receiving extended compensation; there are changes needed in management and operating procedures so that administration of the program can be improved; there are problems with staffing, including the selection and training of claims examiners; compensation benefits increased substantially because of the Office of Workers' Compensation Programs' change in its formula for hearing impairment compensation; and there is a need to establish causal relationship between occupational noise exposure and permanent hearing impairment. Improvements in the program should be made by improving the training and selection of the staff and by establishing appropriate standards, systems, and procedures to correct deficiencies. The Director, Office of Management and Budget, should determine whether it would be advisable to amend the act to place specific monitoring and vocational rehabilitation responsibilities in the employing agencies.