City official offers good news on workers’ compensation reform
Chief Financial Officer Jennie Huang Bennett delivered an encouraging progress report on work done by the outside administrator hired to ride herd on a program that for decades was the exclusive purview of Ald. Edward Burke.
Weeks after taking office, Mayor Lori Lightfoot hired an outside claims administrator to ride herd over a $100 million-a-year workers’ compensation program she claimed was so loosely run, it was “ripe for corruption.”
On Tuesday, Chief Financial Officer Jennie Huang Bennett delivered an encouraging progress report on the work done by Gallagher Bassett, the firm hired to administer a program long run by now-indicted Ald. Edward Burke (14th).
During a luncheon address to the City Club of Chicago, Bennett traced much of the savings to what she called a “nurse triage system.” When an employee calls to make a claim, a nurse walks them “through the incident” to “help determine whether a claim was needed,” she said.
“This process alone [produced] a 30% reduction in incidents being converted to claims,” Bennett said.
“The city also increased closure of non-litigated claims by 10%, reduced days an employee was off work by nine days, reduced the overall claims litigated by 12% and reduced the average cost of medical treatment by 8%.”
Also generating savings is the “enterprise risk management system” put in place to chip away at tens of millions of dollars that Chicago taxpayers shell out each year in settlements and judgments.
Bennett openly acknowledged it’s not “sexy work,” but argued it’s “incredibly important nevertheless.”
“Examples of efficiencies in this area include creating a new driving training for police officers as well as changes to the policy to reduce the incidences of car crashes, which cost the city $22 million over the course of three years,” Bennett said.
“The city also put in place an after-action review for litigation to conduct a root cause analysis on how to improve internal city processes to prevent future settlements and judgments.”
On the day she outsourced workers’ comp, Lightfoot accused Burke, her political nemesis, of allowing 1,300 “open” claims that had already cost the city nearly $300 million to accumulate. More than 600 of those open claims were at least a decade old.
“A system of this size and significance has no business being controlled by a single member of the City Council — not to mention controlled without meaningful oversight, controls or transparency,” Lightfoot said on that day.
“The system that Ed Burke ran was ripe for corruption. ... What we’re trying to do now is establish a bright line that Chicago is actually gonna come into the modern age that is consistent with best practices across the country.”
Lightfoot said the city should have tried to settle those open claims and bring employees back to work or terminate their employment.
Instead, the city continued to shell out disability checks to employees who, in some cases, were well enough to hold other jobs.
“While other cities across the country have long ago reformed and professionalized their own programs, here in Chicago, we continued to operate in such an opaque and antiquated manner that even members of our own City Council didn’t know how the program worked. That all ends now,” the mayor said.
For decades, the program that compensates city workers injured or disabled on the job was Burke’s exclusive purview.
Former Mayor Rahm Emanuel tinkered at the margins to achieve savings, but kept the program in the Burke-chaired Finance Committee — and walled off from scrutiny — until Jan. 3, 2019.
That’s when Burke was charged with attempted extortion and forced to relinquish the Finance Committee chairmanship that had been his primary power base for decades. Only then did Emanuel shift control of workers’ comp from the Finance Committee to the city’s Department of Finance and order an outside audit of the program.
That audit concluded there was little if any effort to “detect potential fraud, waste and abuse” and suggested hiring an outside administrator.
In 2006, a Sun-Times investigation exposed such abuses as allowing patronage workers to file for injury claims at a higher rate than any occupation tracked by the Labor Department — including the most dangerous ones — and paying workers’ comp benefits to people who held outside jobs.
The highest rates of injury coincided with the names of people who had the most clout.
Three years earlier, the Sun-Times ran a series of similar stories, including one about the city forking over $136,036 to a Streets and Sanitation worker who beat up his daughter’s boyfriend while out on disability for an injured hand.
In 2016, whistleblowers again called the workers’ comp program a cesspool of patronage and favoritism. Still, Burke persuaded his Council colleagues to block then-Inspector General Joe Ferguson from auditing the program.