CENTRAL MANAGEMENT SERVICES

CMS’ Division of Risk Management does not have formal written policies and

procedures related to conflicts of interest for Adjusters or other employees processing workers’

compensation claims and payments. From information provided by CMS, the issue of conflicts of interest has only been addressed through emails. CMS provided two e-mails from 2004 and 2006 as documentation of its conflicts of interest policies.

The first e-mail, sent on September 17, 2004, was regarding the disclosure of a relationship between an Adjuster and a claimant. This e-mail was sent to the current CMS Workers’ Compensation Claims Section Manager, who at the time was with the Department of Human Services. The e-mail was then forwarded to others, including many of the current CMS workers’ compensation claims Adjusters. Some of these Adjusters were then with DHS and IDOT. However, all Adjusters employed by CMS during the audit period were not included in the e-mail. The e-mail contained the following policy statement:

“It is the policy of the Division of Risk Management that all Workers’

Compensation and Auto Liability claims be immediately identified and reported by the responsible adjuster if the claimant is a friend, relative, personal

acquaintance, or business acquaintance of the responsible adjuster.”

In this situation, the e-mail instructs Adjusters to notify their supervisor of the

relationship in writing. The supervisor will discuss the matter with the Claims Manager and the Division Manager. The Claims Manager or Division Manager will write a note back to the file regarding the disposition of the file. Options for handling the file include:

• Allow the Adjuster initially responsible for the file to retain it;

• Assign the file to another Adjuster within the Division;

• If the Division Manager deems it appropriate, the Workers’ Compensation Division within the Attorney General’s Office could be requested to handle the settlement of the file.

The second email sent July 10, 2006, by the CMS Workers’ Compensation Claims Section Manager, addressed situations in which a State agency workers’ compensation

coordinator files a workers’ compensation claim. CMS Adjusters are assigned to claims by State agency and work closely with the agency’s workers’ compensation coordinators in obtaining information for claims involving the agency. As a result, conflicts of interest can arise when the claimant is also the agency's workers' compensation coordinator. As a result, if this occurs the assigned Adjuster should notify the Claims Manager and the case will be transferred to another Adjuster.

During our sample of workers’ compensation claims, we identified relationships between Adjusters and claimants. As part of our sample of settlements and awards, we matched workers compensation coordinators' names with the claims provided by CMS. CMS in some cases did reassign cases because of an Adjuster conflict, including claims in which the claimant was the agency's workers’ compensation coordinator. However, even in these cases the Adjuster was still involved sometimes in correspondence with the agency and in processing temporary disability payments for the claimant.

Other claims we sampled included individuals located within CMS Bureau of Benefits and the Risk Management Division:

• A workers’ compensation claims Adjuster in CMS’ Risk Management Bureau received a settlement for a repetitive trauma injury for $40,794;

• A member of management at the Bureau of Benefits received a settlement for Cubital Tunnel Syndrome for $33,635; and

• A nurse in CMS’ Risk Management Division who approves medical bills received a settlement for Carpal Tunnel Syndrome for $22,822.

For the three settlement contracts involving employees from CMS Risk Management, no representative of CMS Risk Management signed the contract agreement. According to CMS officials, these files were turned over to the Attorney General's office for all issues and Risk Management was not involved in the settlements because of the conflict of interest. Therefore, the settlement contracts were neither signed by nor approved by CMS.

According to CMS officials, for these cases the AG reviews the claim for all issues including compensability. However, because the AG does not have the ability to input

information into the CMS workers’ compensation information system, the claim still needs to be managed. This would include tasks such as entering data into the workers’ compensation system and approval of medical bills for payment. For these types of cases there is no written procedure regarding how the claim should be adjudicated and compensated in order to avoid a conflict of interest or the appearance of a conflict.

CMS CONFLICT OF INTEREST POLICIES RECOMMENDATION

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DEPARTMENT

RESPONSE Agreed. Formal written policies have been drafted and will be further developed based upon the recommendations from this audit report and the State Workers’ Compensation Program Advisory Board. Finalized guidelines will be included in the updated policy and procedure manual and reinforced through additional statewide training. Fraud and conflict of interest awareness training was provided to internal staff in August 2011.

ATTORNEY GENERAL

The Attorney General’s Office has established policies regarding conflicts of interest for Assistant Attorneys General. The conflict of interest and ethics policies for employees of the Illinois Office of the Attorney General are found in the Policy and Procedures Manual provided by Attorney General officials. Employees are subject to rules concerning statements of economic interests, conflicts of interest, and outside practice of law and employment. Additionally,

Attorney General officials stated that the Assistant Attorneys General are bound by the rules of professional conduct and are subject to discipline by the Attorney Registration and Disciplinary Commission (ARDC) if they do not follow them.

All employees who are or function as the head of a division, bureau or other administrative unit, have direct supervisory authority over contracts, or have supervisory responsibility for more than 20 or more employees are required to file statements of economic interest on the form provided by the Secretary of State on or before May 1st each year.

Additionally, the Ethics Officer for the office is required to review these statements.

Assistant Attorneys General are required to notify their immediate supervisor as soon as possible of any actual or potential conflict of interest in the representation of any client or agency. Additionally, Assistant Attorneys General are prohibited from engaging in any outside activity that would create or appear to create a conflict of interest. Furthermore, Assistant Attorneys General may not engage in the private practice of law or hold themselves out as being associated with a law firm or a member of any law firm. Violations of the rules for outside practice of law are grounds for termination.

According to officials at the Attorney General’s Office, if an attorney such as an Assistant Attorney General, files a workers’ compensation claim, it is transferred to a different office location outside of the individual’s supervisory chain. In our sample of settlement and awards, we identified three employees of the AGs Workers’ Compensation Bureau who filed a claim and

• An Assistant Attorney General received a settlement for $9,542 for an automobile accident that occurred on his way to a call site;

• A Lead Worker II received a settlement for $23,512 for a carpal tunnel injury; and

• A legal secretary received two settlements for $19,710 and $16,447 for carpal tunnel/trigger finger.

According to AG officials, none of these instances constitutes a conflict of interest under any legal definition.

FRAUD IDENTIFICATION AND CONTROL