Illinois: Auditor finds 'numerous shortcomings' in comp program

The workers' comp program that applies to Illinois' state employees is fraught with problems, says a state audit. The report makes nearly two dozen recommendations and says state legislative changes may be warranted.

The "numerous shortcomings" in the structure and operation of the system "have led to a program that is ill-designed to protect the state's best interests as it relates to processing and adjudicating workers' compensation claims for state employees," the report says.

The Office of the Auditor General reviewed data from January 2007 to December 2010. Included were 26,101 workers' comp claims with more than $295 million paid.

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The self-insured program was operated in-house by large state agencies until 2004. Legislation that year consolidated the workers' comp functions within the Department of Central Management Services.

In addition to the CMS, the Illinois Workers' Compensation Commission and the state attorney general also play a role in processing, reviewing, determining compensation, and paying workers' comp claims filed by state workers. All three agencies were cited by the auditor general.

Among the problems noted were data issues regarding workers' comp claims and cases. The report said information provided by CMS and the WCC contained data that was "incomplete, inaccurate and inconsistent."

Reporting was also an issue, according to the report. State law requires employees to notify the employer within 45 days of the accident or injury. Supervisors must complete a specific form.

In 19 percent of the cases reviewed, the form was missing or incomplete. It was especially noted as a problem in repetitive trauma cases such as carpal tunnel syndrome, which are filed only after the injury is diagnosed or manifests itself.

"We found examples of carpal tunnel syndrome claims in which the date of the accident was listed as years prior to the date reported," the report said. "We also found instances in which the employee was no longer employed with the state when the claim was filed or was on leave for an unrelated workers' compensation claim when they filed another workers' compensation claim for repetitive trauma."

Adjuster caseloads were cited as yet another problematic area. "We found that CMS did not have caseload standards and could not always provide adjuster caseloads."

For 12,613 claims as of May 2011, the auditor said there were eight CMS staff to adjust workers' comp claims and two claims supervisors. "If these claims were distributed equally among adjusters, each adjuster would be responsible for 1,577 claims," it said. "According to workers' compensation industry sources the typical adjuster caseload is 175 to 250 active claims per adjuster."

The report did note that some of the 12,613 open claims may be "inactive and merely being held open by CMS until the expiration of the statute of limitations period."

The report made 22 recommendations and suggested the General Assembly consider further actions, including changes in:

The structure of the workers' comp program, including the nature and location of the workers' comp function -- state agency, CMS, or a third party.
The placement and distribution of the fiscal responsibility for the cost of claims filed by agency employees.
Operational requirements for employees, agencies, CMS, the commission, and the attorney general.

Read more at the WorkersComp Forum homepage.

May 31, 2012

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