Key Takeaways
- •Rep. Mackenzie (R, PA-7) and Rep. McBath (D, GA-6) promoted H.R. 4122 to allow nurse practitioners and physician assistants to order care for energy workers to reduce delays.
- •Stephanie McCloud (Administrator and CEO, Ohio Bureau of Workers' Compensation) explained how Ohio utilized AI for auto-adjudication and managed care organizations to significantly reduce claim processing times.
- •Rep. Omar (D, MN-5) pressed Robert Johnson (President, Sedgwick Government Solutions) on his company's history of legal fines and penalties related to denied medical claims for injured workers.
- •Republicans advocated for adopting private-sector managed care models to increase efficiency, while Democrats argued that outsourcing federal functions to for-profit vendors undermines accountability and shifts costs to taxpayers.
- •Congress will consider modernizing the Federal Employees' Compensation Act to integrate predictive analytics and telemedicine, aiming to improve return-to-work outcomes and reduce administrative burdens for rural claimants.
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Hearing Analysis
Overview
The House Education and the Workforce Subcommittee on Workforce Protections held a hearing on March 18, 2026, titled "Strengthening Federal Workers' Compensation Programs: Ensuring Integrity, Efficiency, and Access." Chaired by Rep. Ryan Mackenzie (R, PA-7), the hearing focused on the Department of Labor (DOL) Office of Workers' Compensation Programs (OWCP), which administers the Federal Employees' Compensation Act (FECA) and the Energy Employees Occupational Illness Compensation Program Act (EEOICPA). The primary objective was to explore modernization efforts, including the integration of new technologies like artificial intelligence (AI) and the expansion of eligible medical providers to improve care for injured federal and energy workers.
Key Testimony
The witness testimony highlighted a divide between proponents of private-sector efficiency and advocates for maintaining robust federal oversight. Robert Johnson, President of Sedgwick Government Solutions, argued that federal programs lag behind the private sector in adopting technological advances. He emphasized that Sedgwick uses predictive modeling and data analytics to identify the most effective providers and outcomes, rather than simply seeking the lowest cost. Conversely, Christopher Godfrey, Director of Research at the Workers' Injury Law and Advocacy Group (WILG) and former OWCP Director, warned that outsourcing core functions to private vendors reduces accountability and shifts costs to taxpayers and other programs like the United States Department of Veterans Affairs (VA) or Medicare. He argued that administrative burdens, often created by private contractors, are what drive physicians away from the federal system.
Stephanie McCloud, Administrator and CEO of the Ohio Bureau of Workers' Compensation (BWC), provided a case study of Ohio’s successful transition to a managed care organization (MCO) model. She noted that since 1997, Ohio has significantly reduced employer premiums and claim determination times. McCloud also detailed the BWC’s use of AI, including "ChatBWC" for policy inquiries and "DataChat" for natural language queries, which have saved thousands of administrative hours. Patrick Howe, Executive Vice President at Nuclear Care Partners (NCP), focused on the specific needs of energy workers suffering from conditions like pneumoconiosis and chronic kidney disease. He testified that current statutes requiring a physician's signature for all care orders create "healthcare deserts" for rural workers, who often must travel hours for routine authorizations.
Policy Proposals
Two primary legislative solutions were discussed. H.R. 4122, the Healthcare for Energy Workers Act, introduced by Rep. Rick Allen (R, GA-12) and Rep. Lucy McBath (D, GA-6), would allow nurse practitioners (NPs) and physician assistants (PAs) to order care under EEOICPA. This bill aims to align the program with the Centers for Medicare & Medicaid Services (CMS) and VA standards. Additionally, the subcommittee discussed the Improving Access to Workers' Compensation for Injured Federal Workers Act, a bipartisan bill introduced by Rep. Tim Walberg (R, MI-5) and Rep. Joe Courtney (D-CT), which would similarly expand provider access under FECA.
Overview
The hearing featured a sharp partisan exchange when Ranking Member Ilhan Omar (D, MN-5) questioned Robert Johnson regarding Sedgwick’s legal history. Rep. Omar cited a $1.5 million settlement in California and a Tennessee fine related to treatment denials, suggesting a pattern of failing to provide adequate care. Johnson defended his organization, stating those cases were not representative of the millions of workers Sedgwick assists annually. Rep. Omar and Ranking Member Robert Scott (D, VA-3) also expressed concern over the DOL’s oversight of self-insured coal operators and the potential for black lung liabilities to be shifted to taxpayers.
Key Testimony
The following organizations were identified and discussed during the hearing: - United States Department of Labor (DOL): The primary agency overseeing federal workers' compensation programs and the target of modernization and oversight discussions. - Office of Workers' Compensation Programs (OWCP): The specific DOL office responsible for administering FECA and EEOICPA. - Ohio Bureau of Workers' Compensation (BWC): Cited as a model for state-level efficiency, specifically regarding its use of MCOs and AI technology. - Sedgwick Government Solutions (Sedgwick): A private contractor discussed both as a provider of efficient claims management and as a subject of criticism regarding its legal and ethical track record. - Nuclear Care Partners (NCP): An in-home healthcare provider for energy workers that advocated for reducing administrative barriers to care. - United States Department of Veterans Affairs (VA): Mentioned as a standard for allowing NPs and PAs to order care and as an entity that bears shifted costs when workers' comp fails. - Microsoft Corporation (Microsoft): Referenced regarding the use of "Microsoft Copilot" and Word/Excel formats for committee submissions. - Centers for Medicare & Medicaid Services (CMS): Cited as a federal healthcare model that already utilizes NPs and PAs for care orders. - United States Department of Energy (DOE): Mentioned in the context of former workers who are eligible for benefits under EEOICPA. - Workers' Injury Law and Advocacy Group (WILG): Represented by witness Christopher Godfrey, who advocated for the "grand bargain" and against outsourcing. - International Association of Industrial Accident Boards and Commissions (IAIABC): Referenced by Mr. Godfrey regarding international best practices in workers' compensation. - California Workers' Compensation Appeals Board: Mentioned in the context of legal decisions and penalties involving Sedgwick. - Iowa Workers' Compensation Commission: Cited as part of Mr. Godfrey’s professional background in state-level administration. - Augusta University: Noted by Rep. Allen as the birthplace of telemedicine programs in his district. - American Academy of Physician Associates (AAPA): Submitted a letter for the record supporting the expansion of PA authority. - 9/11 Health Watch: Submitted a letter for the record criticizing Sedgwick’s service to World Trade Center disaster survivors. - Workers' Compensation Research Institute (WCRI): Cited for data showing that employer-choice systems can sometimes increase costs compared to employee-choice systems. - Employees' Compensation Appeals Board (ECAB): Mentioned as a former workplace of Mr. Godfrey. - United States Postal Service (USPS): Referenced regarding the coordination between DOL and postal inspectors to investigate fraud. - United States Department of Justice (DOJ): Mentioned in the context of prosecuting workers' compensation fraud. - Office of Inspector General (OIG): Cited for its role in auditing DOL programs and investigating questionable data submissions.
Overview
Chairman Mackenzie concluded the hearing by emphasizing the need for bipartisan cooperation to advance policies that reduce red tape and prevent system abuse. The hearing record will remain open for 14 days for additional statements and materials.
Transcript
This subcommittee on workforce protections will come to order. I note that a quorum is present. Without objections, the chair is authorized to call a recess at any time. Today's hearing will examine programs in the Department of Labor's Office of Workers' Compensation Programs, also known as OWCP. Since its establishment in 1916, OWCP has supported workers who experience an injury on the job or develop an occupational disability or disease. Through these programs, workers and their families may receive wage replacement benefits, medical treatment, vocational rehabilitation, and other assistance. As part of its duties, OWCP administers the Federal Employees' Compensation Act, also known as FECA, and the Energy Employees Occupational Illness Compensation Program Act, much longer acronym, and these programs provide billions of dollars in benefits each year to the hundreds of thousands of workers who depend on them. These programs play a critical role in supporting injured workers, which we heard about during our hearing on this subject just last year. Following that hearing, we received valuable input, observations, and perspectives from stakeholders. Today's hearing gives us an opportunity to build on what we've learned and seek out common sense improvements to these programs that help injured workers access high quality care and return to their careers. H.R. 4122, the Healthcare for Energy Workers Act, introduced by committee members Allen and McBath, is one example. This bipartisan bill would expand access to qualified providers and reduce delays in care by allowing nurse practitioners and physician assistants to order care in this program. Last year, the committee unanimously approved a similar bill introduced by Chairman Walberg and Representative Courtney, the Improving Access to Workers' Compensation for Injured Federal Workers Act, which amends FECA. Together, these bills cut unnecessary red tape and help to reduce the hurdles that injured workers are forced to jump through in order to receive the care that they need. By embracing solutions like this, we can deliver the savings and efficiency that taxpayers deserve while also streamlining the care that injured workers count on. In addition to these reforms, we should consider ways to help OWCP run their programs more efficiently. Many state workers' compensation programs have adapted to the evolving technology and healthcare landscapes. Identifying best practices from those programs could help our federal programs improve in terms of efficiency and connecting workers with quality care. From adopting artificial intelligence for assistance in claims processing to strengthening predictive modeling, these practices could help reduce administrative burdens, streamline care, and save money for the American taxpayer. I look forward to hearing from today's witnesses about their perspectives and their recommendations on how these programs can better serve injured workers while ensuring that they run efficiently and operate responsibly. With that, I'd like to yield for our ranking member for her opening statement.
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