January is the halfway point of the chargeback year. As a recap, the chargeback year begins on July 1st each year, and January 1st marks the midpoint for federal agencies managing workers’ compensation claims. With this in mind, agency Workers’ Compensation Specialists (WCS) should begin assessing cases to determine which files offer the greatest opportunity for resolution by June 30th, the end of the chargeback year.
This assessment also supports planning for cases that will carry over into the next chargeback year. However, the goal remains the same: obtain as many case resolutions as possible before the chargeback year ends.
January Marks the Halfway Point of the Chargeback Year
Chargeback savings are compounded, and agencies achieve the strongest savings when they resolve cases earlier in the chargeback year. In other words, the sooner you reach resolution on a claim, the greater the chargeback savings.
Why the Final Six Months Matter for FECA Chargeback Savings
Chargeback costs rise every March 1st due to the CPI increase. That means agency WCS are not only working against new claims coming in every day, but also against the significant impact of CPI on the agency’s overall charge back report. As you can see, the WCS role is complex. You manage older claims, process new claims, and still push to reduce compensation costs.
So you may be asking yourself: what is my game plan for the last six months of the chargeback year, and how do I achieve maximum cost savings?
Your Last Six-Month Game Plan for the Chargeback Year
The first step is to assess current active cases with potential for case action and then prioritize those cases. When you prioritize for the greatest cost savings, working in the order below can help maximize your agency’s chargeback savings.
Priority OWCP Actions That Create the Greatest Chargeback Savings
Identify cases that have a pending OWCP action needed, and prioritize in the order below:
a. 15-day letter (refusal of employment):
When OWCP issues a 15-day letter and a claimant refuses employment, the agency WCS should pursue these claims first. These cases often sit in a position where OWCP can terminate benefits for failure to accept suitable work, or the claimant returns to work.
b. 30-day letter (suitable job offer):
When OWCP issues a 30-day letter finding a job suitable, the claimant has 30 days to accept or refuse the offer. This step typically occurs before the 15-day letter when required. These cases can lead to acceptance of the offered job, or if the claimant fails to reply within 30 days, OWCP may terminate benefits. If the claimant refuses with sufficient reasons, DOL may schedule a Second Opinion Examination or a referee exam.
c. Treating physician indicates the work-related injury has ceased:
When the treating physician states that the work-related injury has ceased, OWCP can often terminate benefits quickly because the opinion comes from the treating provider.
d. Second Opinion Examination (SECOP) supports return to work or resolution:
When a claimant completes a SECOP and the physician opines that the claimant can perform the date-of-injury job or that the condition has resolved, OWCP will provide due process so the claimant can submit evidence supporting continued disability. If the claimant’s treating physician does not present medical conflict, active case management can lead to termination of benefits within a couple of months.
e. Identified work capacity:
When you identify work capacity, prioritize issuing a job offer. This step requires time because the job-offer process must provide the claimant due process.
f. PR review and Social Security offset opportunities (SSDI/SSA retirement):
Review claims on the PR and identify employees who receive SSDI or SSA retirement. When a claimant on SSDI reaches retirement age, DOL converts SSDI to regular SSA retirement, placing the claim in posture for DOL to implement an offset. DOL can finalize SSA offsets quickly, and they can create substantial cost savings for the agency. Form CA-1032 can help WCS confirm whether the claimant receives these benefits. If so, contact DOL to pursue the SSA offset.
Cases that require a DOL action demand persistence and consistent case management, and you should prioritize them. All cases matter, but cases with strong cost-saving potential help the agency reduce expenses and decrease the number of claims requiring long-term management.
Avoid Stale Medical Evidence Before the Chargeback Year Ends
A key concern for WCS is the age of medical documentation. While DOL considers medical information more than a year old to be stale, ECAB has determined that medical evidence can extend up to two years old, although that pushes the boundary. ECAB has held that reasonably current medical evidence is generally less than two years. Keith Hanselman, 42 ECAB:680 (1991). The goal is to resolve cases as quickly as possible to avoid stale medical evidence and to create the greatest chargeback savings.
The Final Push: Reduce This Year’s Costs and Protect Next Year’s Chargeback Report
As you can see, driving claims toward final decisions for cost savings requires careful attention to both resolution strategy and the age of medical evidence. Understanding how vital the final six months of the chargeback year are can impact not only the current chargeback year, but also the following year’s chargeback report—creating substantial savings for the agency.
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Schedule a call with Craig DeMello, a nationally recognized expert in Federal Workers’ Compensation. With over 30 years of experience in public service, Craig provides practical insight and proven expertise to help clients navigate complex federal claims. As a Government Services Specialist at Frasco, he is dedicated to delivering clear answers and effective strategies to support your agency’s goals.
Disclaimer: This blog post is for informational purposes only and should not be considered legal advice. Please consult your general counsel for specific legal guidance. Frasco investigators are licensed, and our operations comply with US industry, federal, state, and local laws.