The Postal Service also has an agreement with OWCP and First Health Corporation, the nation's largest preferred provider organization, to help reduce workers' compensation medical costs. From inception in April 2001 through August 2004, the program has returned more than $2.3 million to the Postal Service and avoided more than $75 million in medical costs.

A significant credit recovery effort doubled the total recoveries attained in 2004 to $43.3 million compared with last year's total of $19 million.

k. Workers' Compensation Fraud

Once postal inspectors identify fraud in the Workers' Compensation Program, they then seek a resolution. The solution may be an arrest, job removal, a long-term job suspension, or a reduction or discontinuance of an employee's compensation benefits (on approval from the Department of Labor). Postal inspectors also search for and identify fraud during the period that claimants are receiving continuation-of-pay (COP) benefits and before the claimants enter the periodic rolls.

Postal Inspection Service investigations in 2004 resulted in $146.2 million in long-term cost avoidance and $19.8 million in COP cost savings, totaling $166 million in cost savings for the Postal Service.

During the course of criminal investigations of workers' compensation fraud this year, postal inspectors identified 760 individuals alleged to have defrauded the workers' compensation program. Investigations in 2004 achieved significant results as identified in Table 1-2.

l. Emergency Preparedness

1. Biohazard Detection System and Related Programs

The Postal Inspection Service's Dangerous Mail Investigations and Homeland Security Group refined the Postal Service's plan for responding to the detection of biohazards in the postal system. To date 182 postal inspectors have been certified and equipped as Hazardous Waste Operations and Emergency Response (HAZWOPER) technicians to respond to and conduct BDS crime-scene investigations.

Postal inspectors continue to work with the Postal Service's Engineering and Emergency Preparedness Groups, as well as other law enforcement and intelligence agencies, on a multiphase project to assess potential terrorist acts that employ chemical, biological, radiological, or explosives threats against the Postal Service. Inspectors also conducted national emergency communications tests as part of the Continuity of Operations Plan. The test ensures that viable communications exist between Postal Inspection Service offices nationwide and Headquarters in Washington, D.C., in the event of an emergency.

The Dangerous Mail Investigations and Homeland Security Group established a postal inspector liaison with three federal agencies: the Central Intelligence Agency, the Federal Bureau of Investigation, and DHS. The liaison enables the Postal Inspection Service to gather intelligence on threats that could affect the Postal Service. An added benefit is that other agencies will learn how to assist the Postal Inspection Service in developing and analyzing threat information as part of a comprehensive, risk-management program.

2. Headquarters Watch Desk

The Inspection Service has classified certain events as "critical incidents" that may have national implications and require immediate action. When such an event occurs, Postal Inspection Service division personnel, other law enforcement agencies, and DHS immediately contact the Headquarters Watch Desk to report information about the incident. Information is disseminated as necessary to postal officials for appropriate action.

The Postal Inspection Service has identified the following events as "critical incidents":

• All bomb incidents.

• All Inspection Service responses to suspicious substances or powder incidents.

• Suspicious, threatening, or harassing mail.

• Inspection Service investigations or actions that result in a shooting, serious bodily injury, or death.

• Violence in the workplace, including homicides, suicides (actual or attempted), robberies, or assaults resulting in serious bodily injury.