Open workers compensation claims and liability cases could cost the city an estimated $14.5 million, according to a report from the city’s third party administrator Galloway-based Claims Resolution Corporation.
The city has 339 open workers compensation claims and 303 liability cases as of May 13th, 2016, according to the report. Overall the city has 642 open claims.
Workers compensation claims are filed by employees injured while on duty and liability claims emerge from car accidents involving city vehicles, slip and fall, and other cases.
“Whenever there’s an open claim they have to appropriate a certain amount of money so that they know what we’re expected to payout,” said the city’s risk manager Samir Goow to council members on Tuesday, May 17th, 2016.
Goow said during his one-year tenure 572 claims were closed.
There were 1,214 workers compensation claims and liability cases estimated to cost $16.87 million when he came on board. $2.3 million was shaved from the $16.87 million estimated figure after the 572 claims were closed, according to the report.
“I’m pleased to see the overall number of claims are trending down,” said council president William McKoy. He asked the risk manager what steps have been taken to reduce the city’s exposure.
Goow said in many cases he met with injured workers to verify claims. He also said safety meetings have been conducted with department heads where risk managers, adjusters, and consultants advise high ranking employees on best practices on ensuring worker safety.
“There’s an ongoing pattern of training as we speak,” said Goow. Alex Mendez, councilman at-large, told Goow there are employees, who suffer an injury but are back to doing the same task again the next day.
Mendez said poor practices like that open the city up for more claims. Goow said there are ongoing steps that are being taken to address this issue.
Goow was able to reduce the number of outstanding claims with the help of a measure the city council approved some months ago which allowed the administration to pay out claims $15,000 or less.
In the past the administration had to obtain case-by-case approval from the council to settle each of the claims; however, the policy change allowed attorneys to strike settlements and close cases in a speedy manner.
Goow said this faster process also benefited the city by giving claimants the option to receive quick settlements or face a lengthy process. “They are taking the money,” he said. “They’d rather have it now than wait.”
The city recovered $81,000 in subrogation claims in the past year, said Goow. The two years prior to that the city recovered zero dollars, he said.
There were 511 new claims since June of 2015. 212 worker compensation claims and 299 liability cases. Goow reviews the cases to determine whether the claims are legitimate. He does not believe all the cases are legitimate.
Goow predicts the overall numbers to continue to trend downwards. He said the awareness that someone is reviewing each of the cases will assist in deterring fraudulent claims.
Earlier in the month, the city council increased the workers compensation budget by 11-percent or $600,000 to $6 million for fiscal year 2016.