Workers’ Compensation Update – Two Important Articles

Workers’ Comp steps up to stop fraud

By Mark Williams

The Columbus Dispatch
Monday July 22, 2013 6:59 AM

More staff members and new tools helped the state agency for injured workers identify $55 million in savings during the past year from workers’ compensation fraud, according to a new report.

The report, recently released by the Ohio Bureau of Workers’ Compensation’s Special Investigations Department, showed that 236 cases were referred for prosecution, and there were 134 indictments and 140 convictions in the year that ended on June 30.

More than 2,000 cases, some that might go back several years, were closed during the period. “Those who would commit fraud need to understand it’s not a victimless crime. They are hurting Ohio’s employers and making it harder for us to treat truly injured Ohioans,” said Steve Buehrer, the bureau’s administrator, in a statement.

While the savings of $55 million was down from the $59 million that was produced the year before, the report showed gains in several categories, including the prosecution of those who fraudulently received benefits. The savings come from overpayments and money that would have been paid into the future had the fraud not been caught.

For example, more than half the savings, $30.2 million, came in cases of workers collecting benefits. The team won 100 convictions, up from 81 in the previous year.

The report identified the hiring of additional special agents and criminal investigators and notes that the digital forensics unit had a “breakout year” last year, doubling how much data the unit’s members were able to analyze. The team analyzes data from computers, laptops, servers, iPads and smartphones, and its searches for  rongdoing extend to social media.

“We’ve always had this mission to go after the providers, the employers who commit fraudulent acts against the system and the claimants,” said Shawn Fox, a special agent for the bureau.

The health-care-provider team identified $11.9 million in savings as it looked for fraud committed by providers such as doctors and hospitals, pharmacies and managed-care organizations.

The employer team, which investigates fraud committed by employers, generated $3.5 million in savings and got 43 indictments and 33 convictions.

Another focus for the bureau continues to be prescription-drug abuse by workers and health-care providers. Reviews found 171 cases where prescriptions were not necessary, generating $9.5 million in savings.

The $55 million in savings is a fraction of the $2 billion or so the bureau spends a year, meaning that “99.9 percent of doctors, claimants and employers are doing the right thing,” Fox said.

He said every dollar spent on investigating allegations of fraud produces $5 in savings.


Worker’s Comp disputes ruling that it overbilled employers

By Mark Williams

The Columbus Dispatch
Tuesday July 23, 2013 1:27 AM

Backed by business and labor groups, the state agency for injured workers has filed new legal documents in its fight to overturn a judge’s ruling that some employers were overcharged $860 million in workers’ compensation premiums from 2001 to 2009.

The Ohio Bureau of Workers’ Compensation is appealing a ruling in March by Judge Richard McMonagle of Cuyahoga County Common Pleas Court in a lawsuit that charged that the bureau improperly gave discounted premiums to employers that joined group-insurance plans while charging higher rates to those not in the groups.

A group of about 270,000 employers called Pay Us Back Ohio BWC filed the lawsuit. Many members of the group are small-business owners.

About $105 million of the $860 million is owed to 35,000 businesses in the Columbus area, including 3,000 owed $5,000 or more and 143 due at least $100,000, the group says. One employer is due $1.4 million.

“We continue to believe BWC acted within its authority in establishing rates and that the plaintiffs’ claims are without merit,” Steve Buehrer, the bureau’s CEO, said in a statement issued yesterday.

On Friday, the bureau filed a brief with the 8th District Court of Appeals in Cleveland outlining the reasons it believes the ruling should be overturned. It was backed by a separate brief filed by groups that include the Ohio Chamber of Commerce, the National Federation of Independent Business and the AFL-CIO.

“The level of uncertainty caused by this decision is unacceptable for both businesses that pay into the system as well as workers who depend on BWC to provide medical care and wage replacement when they are injured,” said Andrew Doehrel, the chamber’s president and CEO.

In the brief, the bureau defends its right to set rates and says letting the court set rates sets a dangerous precedent.

“The law does not allow the court to override BWC’s rate-setting discretion and retroactively set workers’ compensation premiums where, as here, BWC acted lawfully and within its discretion,” the brief says.

A spokesman for Pay Us Back said the bureau is misstating the facts in the appeal documents.

“Instead of doing the right thing and paying back the 270,000 Ohio employers they admit they overcharged, all we are seeing are more costly legal games,” spokesman Brian Wright said in a statement.

Wright said McMonagle’s ruling ordered the bureau to comply with the law.

“What the ruling undercuts is a failed group rating system that forced Ohio employers’ workers’ compensation rates to skyrocket, in some cases as high as 8,000 percent,” he said. “Thousands of Ohio job creators went out of business because of their failed policies.”  The bureau’s appeal comes two months after it outlined steps to help the state’s employers. They include $1 billion in rebates of workers’ compensation premiums for more than 200,000 employers, rate reductions for public and private employers, and grants to make workplaces safer.

The bureau also has argued that employers in the lawsuit received $1.26 in benefits for every $1 in premiums they paid, and that half of all the class members would receive less than $200 from the case.


Please feel free to contact Kelly Fraatz, Paralegal in Workers’ Compensation Department, at (440) 695-8059 or with any questions.