USPS OIG: The High Cost of Low-Cost Mail
USPS OIG Survey on the biggest challenges facing the Postal Service in reducing costs. A recent paper published by OIG found:
“1. The mail business is labor intensive, and labor makes up 80 percent of Postal Service expenses. This means that in order to achieve real cost savings, the Postal Service has to cut labor costs. While ideally labor costs could be cut to match declines in volume, this is challenging because the Postal Service’s delivery network has significant fixed costs.
2. Since 1972, the total cost of benefits to the Postal Service has risen an astounding 448 percent above inflation, while the real amount spent on wages has declined by nearly 3 percent. This extraordinary increase in benefit costs is due to three factors: a general trend of higher benefit costs that has affected most U.S. companies, the gradual transfer of postal retiree benefit costs from the federal government to the Postal Service, and repeated overcharges for these retiree benefit cost”
Senator Collins: OIG Audit Shows Stunning Evidence Of Excessive Postal Execs Perks
Filed under: oig, postal, postal news, press releases, usps
Finds It Unbelievbable That USPS Covers 100 Percent Of Health Insurance For 835 Top Execs
WASHINGTON, D.C. – The U.S. Postal Service pays 100 percent of health insurance premiums for 835 of its top employees, an expensive perk that occurs at no other federal agency, Senator Susan Collins, Ranking Member of the Senate Homeland Security and Governmental Affairs Committee, confirmed Friday.
The additional information comes one day after Senator Collins released the findings of three investigations of the Postal Service (USPS) by the Postal Inspector General (IG), which she had requested to determine whether the agency could realize additional efficiencies and cost savings in three areas: employee benefits, purchasing policies, and the area and district field office structure.
Upon further questioning of the IG’s office on Friday, Senator Collins learned that as of June 4, 2010, the USPS was paying 100 percent of health benefit premiums for 835 employees. The perk covers employees in the following categories: Postal Career Executives, Executive & Administrative, Other Executives levels, Postal Regulatory Commission, and Office of Inspector General Directors. She also confirmed that no other federal agency pays 100 percent of employee health insurance premiums.
“It is unbelievable to me that the Postal Service – awash in red ink and asking for huge postal rate hikes, service reductions and relief from its financial obligations – is paying the full health care premiums for its top executives,” said Senator Collins, whose committee has oversight jurisdiction of the Postal Service.
The findings of the audits released yesterday illustrated stunning evidence of contract mismanagement, ethical lapses, financial waste, and excessive executive perks that cost the Postal Service more than $800 million a year in unnecessary costs.
Among the disturbing deficiencies uncovered by the IG are that:
· the USPS awarded 359 contracts to former Postal Service executives without competition. In three cases that the IG examined most closely, the former employees were hired at nearly twice their former pay to advise new executives, a practice which the IG found raised serious ethical concerns and hurts employee morale;
·the Postal Service pays 100 percent of its senior executives’ health benefits, a perk that is not provided to comparable employees in any federal agency;
·postal employees participate in many of the same health insurance and life insurance programs as federal employees, yet the Postal Services pays a greater share of the premiums;
·the Postal Service’s contract management did not protect the USPS from waste, fraud, and abuse;
·the Postal Service could not even identify how many contracts were awarded without competition, and the IG found that 35 percent of the no-bid contracts lacked justification; and
·significant savings could be achieved by consolidating the USPS’s area and district field offices.
Archive: Postal Execs Compensation & Perks Reported Last Year
Unions Reach Settlement In Lawsuit Charging USPS With Intrusions Into Employees Medical Records
APWU News
The APWU and National Association of Letters Carriers (NALC) reached a settlement [PDF] with the Postal Service on May 20, 2010, ending a 2008 lawsuit in which the unions charged the USPS with “systematic and widespread intrusions” into members’ medical records. The settlement requires the Postal Service, agents of the USPS Office of Inspector General (OIG), and officers of the Postal Inspection Service to provide specific documentation to healthcare providers when they request medical information about postal employees.
In accordance with the agreement, the Postal Service and its agents must present a “HIPAA letter” to healthcare providers before asking them to disclose any health information about employees. The letter must include a description of the information sought and a statement demonstrating how it is relevant to a legitimate law enforcement inquiry. The letter also must instruct healthcare providers to provide only information that is relevant to the investigation of the employee’s alleged violations of law.
HIPAA is the Health Insurance Portability and Accountability Act of 1996, which protects the security of health data. The law outlines rigorous rules for safeguarding the privacy of medical records, but permits healthcare providers to disclose information to law enforcement officers and “health oversight” agencies without patient consent for legitimate law enforcement purposes and other activities authorized by law.
In accordance with HIPAA rules, the letter requesting medical information instructs healthcare providers to refrain from notifying employees of the disclosure of their records for a period of 30 days, unless OIG agents or Postal Inspection Service officers request a longer period.
The settlement addresses two major concerns that prompted the lawsuit: The alleged intimidation of healthcare providers by OIG agents and Postal Inspectors, who frequently demanded employees’ medical records without explanation, and the indefinite prohibition against healthcare providers notifying postal employees about the disclosure of their records.
“The OIG can no longer violate employees’ rights by using police state tactics when conducting sick-leave or workers compensation investigations,” said APWU President William Burrus. “The obligation to provide details about a request — instead of demanding access to private records — prevents the OIG from abusing its power when investigating routine personnel matters.”
Postal Contracts
The U.S. Postal Service Office of Inspector General (OIG) intends to award a Blanket Purchasing Agreement (BPA) to a qualified organization to assist OIG staff with specific subject matter expertise in areas such as Postal Economics, Financial Reporting, Transportation, Engineering, Supply Management, Delivery, Sales and Service, Information Technology (IT), and Network Optimization.
https://www.fbo.gov/spg/USPS/SSP/OIG/6HQOIG-10-A-0005/listing.html
The OIG has undertaken a project to upgrade existing analog Closed Circuit Television (CCTV) systems to an IP based camera system known as the Integrated Security and Investigative Platform (ISIP). The ISIP is to be deployed at USPS facilities nationwide in order to provide OIG Special Agents with enhanced video surveillance capabilities of activities occurring within USPS facilities.
https://www.fbo.gov/spg/USPS/SSP/OIG/6HQOIG-10-A-0006/listing.html
Direct Mail Online Solution
USPS is looking to enter into business relationships to enable access to a comprehensive, end-to-end, online direct mail solution targeted at Small and Medium size Enterprises (SME). The online solution will be:
• A convenient and easy-to-use, turnkey online service providing end-to-end functionality that allows SMEs to develop and execute direct marketing campaigns in a few simple steps.
• A standardized and scalable platform that can be leveraged across SME segments and distribution channels
https://www.fbo.gov/spg/USPS/SSP/PPHQ/RFI-SMEDM-03302010/listing.html
USPS eSourcing
All suppliers interested in doing business with the U.S. Postal Service should register their organization in the Supplier Registration module of the USPS eSourcing solution. Registration provides suppliers the opportunity to ensure their organization is included in this extensive supplier database. USPS eSourcing is a web-based electronic solicitation and reverse auction application that automates, standardizes, and streamlines the sourcing of supplies, services, equipment, transportation, and facilities. The solution is also utilized as one additional method for USPS to search for viable suppliers.
Supplier registration provides suppliers eligibility to participate in USPS eSourcing events. Suppliers can access the solution at https://uspsesourcing.emptoris.com. Once on the landing page, simply click on the “Register Supplier Organization” hyperlink to begin the registration process. Suppliers are encouraged to review the eSourcing Supplier Registration Guide (located at http://www.usps.com/suppliers/howto/registration.htm) prior to starting the registration process. This guide provides insight to completing the registration entry.
https://www.fbo.gov/spg/USPS/1/1/USPS-SUPPLIER-REGISTRATION/listing.html
Surgeon Tried to Get Easy Money in the Big Easy
The Office of Inspector General (OIG) has investigated many fraudulent workers’ compensation claim cases. Most of these investigations involve postal employees scamming the system. But, employees aren’t the only ones who abuse the system. Sometimes, medical providers used by postal employees injured on the job, defraud and abuse the system. A few seek to take advantage of this program by submitting false bills, colluding with claimants to extend benefits, or falsifying claim documents. But OIG Special Agents, along with the Department of Labor OIG, found an orthopedic surgeon in New Orleans with a scam of his own.
The surgeon, who operated a medical practice in New Orleans, claimed to have performed health care services after Hurricane Katrina when his office was not even open! Forty-seven of the claims involved names of postal employees. The surgeon pled guilty in federal court to fraud and has agreed to pay $750,000.00 in restitution. He also faces a possible maximum sentence of 10 years in prison and a fine of $250,000 at his sentencing in May. – USPS OIG
Press Release from the US Attorney’s Office for the Eastern District of Louisiana
PHYSICIAN PLEADS GUILTY TO HEALTH CARE FRAUD OFFENSE
DR. WINDSOR DENNIS, age 78, and a resident of New Orleans, Louisiana, pled guilty in federal court today before U. S. District Judge Ivan L. R. Lemelle to one count of health care fraud, announced U. S. Attorney Jim Letten.
According to court documents, DR. DENNIS, an orthopaedic surgeon who operated a medical practice in New Orleans, billed the U. S. Department of Labor, Office of Worker’s Compensation, for health care services he claimed to have performed after Hurricane Katrina when his office was not open. He has agreed to pay $750,000.00 in restitution to the U. S. Department of Labor.
DR. DENNIS faces a possible maximum sentence of ten (10) years, a fine of $250,000 and three (3) years of supervised release following any term of imprisonment. Sentencing has been scheduled for May 26, 2010.
Daniel R. Petrole, Acting Inspector General, United States Department of Labor, stated:
“This plea is the result of collaboration by several Federal agencies working together to root out workers’ compensation fraud and bring those responsible to justice. We will continue to detect and quickly respond to fraud schemes perpetrated against the Department of Labor programs.”
David C. Williams, Inspector General for the U.S. Postal Service, added”
“Today’s plea and restitution agreement by Dr. Windsor Dennis is a significant victory in the ongoing battle against fraudulent workers’ compensation claims. The workers’ compensation program benefits thousands of postal employees who have received legitimate on-the-job injuries. But false claims, particularly by health care providers, undermine the system.”
The case was investigated by the Offices of Inspector General for the United States Postal Service and the United States Department of Labor. The case is being prosecuted by Assistant U. S. Attorney Patrice Harris Sullivan.