WORKERS COMPENSATION (WC)

Office of Finance

Office of Human Resources Management

Office of Law

WORKERS’ COMPENSATION (WC)

Problem Statement

The County’s Risk Management deficit is increasing

Estimated accrued debt has increased 40.3%, from $62 million in FY 2008 to $87 million in FY 2011

$25 $27 _{$24 $22} $62 $67 $80 $87 $0 $20 $40 $60 $80 $100 $120 FY 2008 FY 2009 FY 2010 FY 2011 Milli o n s

Estimated PAYGO Estimated Accrued Debt Why should the County focus its attention on workers’ compensation?

 Workers’ Compensation claims make up 64% of all Risk Management claims received and 84% of all Risk Management payments

Current Structure and Funding Issues

The County must deal with two funding issues:

 Keeping pace with the annual cost pressures related to risk management

funding, which are tied to fringe benefits (Current portion of estimated liability on pending claims)

 Additional funding needed to gradually close the accumulated deficit

associated with risk management liability (Estimated liability on pending claims

The County’s Risk Management structure:

 Includes County Government agencies, the Board of Education (BOE), the Community College, and the Memorial Library System

 Excludes Revenue Authority and Housing Authority

 Board of Education has its own Risk Manager and staff; however, the County’s Safety Officer provides training to all of the funds’ entities as requested

 Approximate total number of employees (FY 2012): 23,479

 County Government (6,219), BOE (16,173), Community College (815), Memorial Library (272)

 Third Party Administrator, CorVel, handles the processing, managing, and subrogation of all claims from inception to disposition

Worker’s Compensation Claim Process

Coordinator (DRC) DRC Files Claim with

CorVel CorVel Investigates

Claim/Claim filed with State Worker’s

Compensation Commission (WCC) Issues payment of benefits made by County or claim is contested

WCC hears case and issues ruling

County can appeal WCC ruling in Circuit

CorVel Claim Review Process

Claim received by CorVel Claim assigned to nurse _{and claims supervisor} Nurse reaches out to _claimant

Supervisor assigns claim to claims specialist Claim specialist contacts

claimant, the reporting supervisor and medical

provider to confirm claim details Claim specialist develops

action plan and implements

Supervisor reviews claim progress every 30, 60

Worker’s Compensation Benefits Process

Healing Period

Medical Care & Treatment • Temporary Total Disability • Temporary Partial Disability Paid Voluntarily or if entitlement is contested Maximum Medical Improvement Benefits Permanent Partial Disability Permanent Total Disability Or Vocational Rehabilitation Permanency/Death Benefits can be paid

By Stipulation: Parties agree on

amount of

permanent disability (claim open for future benefits)

By Settlement: Parties agree on a

dollar sum to be paid & future “life” of the claim

Or paid following hearing at Worker’s

Compensation Commission & the issuance of an order

•

An employee who is temporarily disabled, resulting from an injury

or illness sustained directly in the performance of their work, is

entitled to disability leave.

•

Employees must report an injury within 24 hours of the occurrence.

•

Disability leave is approved by the Office of Human Resources

Management, except for requests stemming from the Fire

Department.

•

Disability leave is not deducted from an employee’s annual or sick

leave balances.

•

The maximum amount of disability allowed is 180 days, although

some labor groups have a different maximum amount.

*Disability leave is documented in Personnel Law 12-224 and Personnel Procedure 284

Disability Leave Program

Employee:

-Suffers injury/illness -Reports injury with in 24

hours Physician: -Treats employee -Completes Attending Physician's Statement (APS) Supervisor:

-Collects APS from employee -Completes injury forms: 1st

Report of Injury, Form 1383, Form 1384

Personnel Liaison/Coordinator: -Verifies Information

-Sends all forms OHRM:

-Reviews DL Request -Completes Form 2099

Employee Department

Payroll OHRM DL file

Methodology

Things to know as you review the data contained in this presentation



Claim counts are for all claims received within the stated fiscal year

(regardless of when the incident actually occurred)



This is the normal reporting method used for submitting information to

the State of Maryland



Claim payments are for all payments made in the stated fiscal year

regardless of when the claim was received



This method results in less fluctuation in yearly data as a result of when

a report is run



Method is useful for determining the County’s financial obligation for

the fiscal year in question



When the presentation refers to County Government it is excluding the

Risk Management Fund Historical Trend – Claims

Total number of claims 4,691 4,789 4,160 4,290 4,119 12% 2,942

Number of WC claims 2,817 2,839 2,716 2,721 2,748 2% 2,171 BOE % of WC claims 52% 54% 55% 54% 57% 10% 56%

Workers’ Compensation from FY 2007-FY 2012 (thru April 30th₎

makes up almost two-thirds of Risk Management claims

Category FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 % Change FY07 to FY11 FY 2012* Total payments (millions) $39.5 $40.1 $38.7 $46.2 $50.9 29% $43.2 WC claims (millions) $35.2 $34.0 $34.9 $38.4 $39.3 12% $35.8

Workers’ Compensation from FY 2007-FY 2012

(thru April 30th₎ makes up 64% of Risk Management

claims, but more than 80% of Risk Management payments *As of April 30, 2012 Workers' Comp 84% Auto Liability 4% General Liability 11% Property Damage 1%

Risk Management Fund Historical Trend – Payments

Fringe Benefits

Workers’ Compensation as a Percentage of Fringe Benefits

Fringe benefits, which include items such as health benefits and workers’ compensation, have been steadily increasing over the last five fiscal years

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Historical Trend – Workers’ Compensation

FY07 FY08 FY09 FY10 FY11 Trend FY12* Cases

New claims 2,817 2,839 2,716 2,721 2,748 2,171

Open cases as of 4/30/12 166 160 279 392 628 - 1,047

Number of claims with

lost time from work 1,060 843 849 799 914 583

Cost

Average medical $ $3,459 $3,626 $3,434 $3,475 $3,611 $3,945 Average benefit $ $9,809 $10,639 $10,641 $11,700 $12,106 $11,533

Adopted from Montgomery County CountyStat

• Several indicators have remained steady

• Average benefits costs (indemnity payments) have increased by 23%

• Open claims provide opportunity for additional review and strategies towards closure

Workers’ Compensation Breakdown

Percentage of Payments By Cluster

Public Safety 92% Public Works &

Environmental Resources 4% General Government 4%

CLUSTER NUMBER OF AGENCIES NUMBER OF EMPLOYEES

Public Safety 5 4,436

Public Works & Environmental Resources 3 999

Workers’ Compensation – Public Safety

Points of Interest

• Police makes up 47.3% of all Public Safety claims while accounting for almost two-thirds of all Public Safety payments, followed by Fire at 32.4% of claims and one-fifth of payments

• Accounts for approximately 71% of County Government employees

• 44% of the Fire Department’s claims between FY 2007 and FY 2012 are from employees 70% 75% 80% 85% 90% 95% FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cluster’s Percentage of County Government’s Total

Claims Payments

Workers’ Compensation – Public Works and

Environmental Resources

Points of Interest

• DPW&T makes up 65.6% of all Public Works & Environmental Resources’ claims while accounting for 58% of all the cluster’s

payments, followed by DER at 34.3% of claims and 41.7% of payments

• Accounts for approximately 16% of County Government employees

Cluster includes: Public Works & Transportation (DPW&T), Soil Conservation, and Environmental Resources (DER)

0% 5% 10% 15%

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cluster’s Percentage of County Government’s Total

Workers’ Compensation – General Government

Points of Interest

• Central Services is responsible for 25.5% of all General Government claims while accounting for only 17.8% of all cluster payments

• Accounts for approximately 13% of County Government employees

Cluster includes: All County Government agencies not included in the Public Safety and Public Works & Environmental Resources’ clusters 0% 5% 10% 15% 20% FY 2007 FY 2008 FY 2009 FY 2010 FY 2011

Cluster’s Percentage of County Government’s Total

Workers’ Compensation Breakdown

Top 10 Agencies - County Government Only

Agency FY 2007 – FY 2012 (as of April 30

th₎

Percent of Claims Percent of Payments

1. Police Department 39.60% 53.31%

2. Fire Department 27.11% 23.68%

3. Office of the Sheriff 5.99% 8.56%

4. Corrections 9.21% 6.65%

5. Public Works 5.74% 1.99%

6. Environmental Resources 3.00% 1.43%

7. Central Services 1.92% 1.20%

8. Circuit Court 1.02% .77%

9. Housing & Community Development .49% .66%

10. Health Department .96% .43%

Workers’ Compensation Claims Benchmark

Jurisdiction 2009 2010 2011 % change

2009 to 2011

Baltimore County 3,734 3,966 4,094 9.6%

Baltimore City 3,745 3,655 3,698 1.3%

Prince George’s County 2,998 3,035 3,003 0.2%

Montgomery County 1,987 1,990 2,043 2.8%

Anne Arundel County 1,873 1,964 1,967 5.0%

Harford County 1,065 937 1,014 4.8%

Session Findings and Recommendations

•

Finding #1: Risk management is not accounted for in annual

employee performance evaluations, with the exception of the Fire

Department.

o Recommendation A: Safety evaluations and accidents should be

incorporated into an annual employee performance evaluations.

o Recommendation B: Repeat claim filers should be put through additional

safety training.

•

Finding #2: Internal policies requiring agencies to investigate

work’s compensation injury claims should be reviewed and

strengthened.

o Recommendation A: Supervisors and DRCs should investigate injury

claims as soon as they are notified.

o Recommendation B: Clear documentation procedures should be drafted

by OHRM and OOL and given to supervisor and DRCs. This will help protect the County if the claim award is appealed to the WCC.

Session Findings and Recommendations (cont.)

•

Finding #3: The availability of light-duty assignments across all

government agencies is unknown and not coordinated.

o Recommendation A: OHRM should create and manage a government