Office of Risk Management and Insurance Services Workers’ Compensation Program Update
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Office of Risk Management and Insurance Services Workers’ Compensation Program Update Audit, Business and Technology Committee October 5, 2004 David Holmquist, Director of Risk Management and Insurance Services 1 Workers’ Compensation 2003-2004 Summary Goals and Results 2003-2004 Additional Achievements/Initiatives Legislative Update Goals and Objectives 2004/05 2 ORMIS Program Objectives and Results Standard 6/30/03 Baseline 6/30/04 Goal Results Number of Claims Filed 7018 7000 6818 Amount Paid Board Reports $108 million $110 million $117 million Number of Open Claims 9028 7300 7789 Average Cost Per Claim $23,500 $23,500 TBD 200,000 140,000 105,983 Number of Litigated Claims 4730 4000 3460 Allocated Litigation Costs $11 million $9.5 million $8.1 million Workers' Comp Training None 35 sessions 33 sessions $289 million Growth toward full funding ($566 million) $333 million Number of Lost Work Days Reserve Fund Balance *Workers’ * compensation temporary disability days paid Source Sedgwick CMS Goals and Results 2003-04 3 Claims Reported by Fiscal Year 3.8% reduction in the number of claims filed in the last fiscal year 7178 7085 6818 1754 1799 1730 2619 2515 2694 Incident Only Medical Only * Indemnity ** 2805 2001 - 2002 2771 2394 2002 - 2003 2003 - 2004 * Claims w/time lost due to disability 4 Source Sedgwick CMS Goals and Results 2003-04 Focusing on Prevention to Reduce the Number of Claims Office of Risk Management & Insurance Services (ORMIS)/Office of Environmental Health & Safety (OEHS) Committee – Joint site visits on Illness and Injury Prevention Plan to promote safety – OSHA Reporting District-wide Training – 33 sessions in 03-04 fiscal year Increased awareness of fraud prevention program Goals and Results 2003-04 5 Payments Over Last Fiscal Year Our WC program costs increased only 5.7% over the last fiscal year Despite: – 23% increase in Temporary Total Disability rate – Approximately 8% increase in maximum Permanent Disability rate – 4.4% increase in the cost of medical care* – Initiative to close older claims * Bureau of Labor Statistics (CPI) 6 Goals and Results 2003-04 WC Costs by Fiscal Year $ 120,000,000 $ 100,000,000 $ $ $ $ 80,000,000 Expense Indemnity* 60,000,000 Medical 40,000,000 Total 20,000,000 2001 - 2002 2002 - 2003 2003 - 2004 * Payments for permanent disability & lost time Source: Sedgwick CMS 7 Goals and Results 2003-04 Fiscal Year 2003-2004 Payments Related to Claims Filing Date 88.8% of the 2003-2004 costs were on claims filed in previous fiscal years Add Slide $12,968,786 2003 - 2004 $43,846,382 $23,926,896 2002 - 2003 2001 - 2002 2000 - 2001 $15,578,597 $19,930,252 Prior to 2000 Total Paid as of 6/30/04: $116,250,912 Source: Sedgwick CMS 8 Goals and Results 2003-04 Results of Current Medical Management Programs (8/10/03 - 6/30/04) Pharmacy management program (Medical Services Company) – $894,181 reduction Bill Review – adjustments per fee schedule and PPO rates – $40,162,798 reduction Utilization Review – $190,203 reduction 9 Goals and Results 2003-04 Number of Open Claims 12000 10000 9802 8807 8904 8722 8623 8242 8000 8036 7789 Number of All Open Claims by Month 6000 Number of Claims Reported by Month 4000 2000 489 0 468 481 576 789 612 659 588 * Nov-03 Dec-03 Jan-04 Feb-04 Mar-04 Apr-04 May-04 Jun-04 * Data Conversion completed in November, 2003 10 Source: Sedgwick CMS Goals and Results 2003-04 Closed Claims by Fiscal Year 8000 7000 6000 3508 5000 4000 2784 Medical Only 2639 Indemnity 3000 2000 2520 3653 2582 1000 0 2001 - 2002 2002 - 2003 2003 - 2004 11 Source: Sedgwick CMS Goals and Results 2003-04 Claims Currently Open 20.5% reduction accomplished due to: Increased involvement of ORMIS staff Block settlement conferences File review conferences Comprehensive claims handling by Sedgwick CMS 12 Goals and Results 2003-04 Training ORMIS (in conjunction with OEHS) trained: – – – – – Administrators Managers and Supervisors School Administrative Assistants School Police Other employee groups Training Topics – – – – – How and when to report WC injuries Accident Prevention Time reporting Stay-At-Work Fraud Prevention Goals and Results 2003-04 13 Stay-At-Work Program Reduction of lost work days – 200,000 (FY 02/03) – 105,983 (FY 03/04) Specific Initiatives – – – – Mandatory policy approved 09/03 Procedures and guidelines developed 03/04 Stay-At-Work Program staffed 06/04 Coordinated procedures with other District departments and Sedgwick CMS – Integration of disability-related functions – Fraud Awareness 14 Goals and Results 2003-04 LITIGATION MANAGEMENT Activity FY 02-03 FY 03-04 Block Settlement Conferences 1 5 Attorney Referrals Approved 780 355 Law Firm Bill Reviews 0 12 None TyMetrix Effective July 1, 2004 (First quarterly report due 10-1-04) Automated Legal Bill Review 15 Goals and Results 2003-04 Fraud and Abuse Reduction/Elimination (FARE) Program Task Force Communication Identification – ORMIS – Sedgwick Fraud Unit and Claims Adjusters – School Police Results – Referrals – Other Next Steps – – – – Notice on leave forms and checks Newsletter Alternative prosecution efforts Website Goals and Results 2003-04 16 Additional Accomplishments Collaboration with Bargaining Units Website thru www.lausd.net link Workers’ Compensation Reference Guide Workers’ Compensation and Act of Violence Leave Processes 17 Goals and Results 2003-04 Legislative Changes AB749 SB (1/01/03) 899 (4/19/04) SBX4 2 (9/13/04) 18 Initiatives for This Fiscal Year TyMetrix Medical Network Claims Audit Study Alternative Charge Back System Staff Development Actuarial Study 19 Goals and Objectives 2004-05 Goals and Objectives Fiscal Year 2004-2005 Standard 6/30/04 Baseline Revised 6/30/05 Goals Number of Claims Filed A d Number of Open Claims d c Per Claim Average Cost h Number of Lost Work Days a Number of Litigated Claims r Allocated Litigation Costs t 6818 6650 AmountPaid Board Reports $117 million $115 million 7789 7000 Pending Actuarial Evaluation Pending Actuarial Evaluation 105,983 80,000 3460 2950 $8.1 million $6.5 million Workers' Comp Training 33 sessions 50 sessions Reserve Fund Balance $333 million $373 million 20 Goals and Objectives 2004-05 Thank you for your support and consideration 21