Workers' compensation in a state of disaster
Another nightmare of government malpractice has been revealed.
No one who paid attention to news reports of questionable practices surrounding workers' compensation cases at the prison in Menard can be surprised by the problems outlined in a recent audit of the state's workers' compensation program.
But it's one thing to expect problems to be identified and quite another to read the laundry list of dysfunction outlined by Auditor General William Holland.
Even Holland's low-key phrasing — he calls it a "program that is ill-designed to protect the state's best interests" — is not enough to block the realization that the state's workers' compensation program is in free-fall, that no one seems to be able to do anything about it or care to try, that state taxpayers are being fleeced of millions of dollars or that anything will change absent a complete restructuring of failing government bureaucracies.
"Because of the extensive problems that permeate the workers' compensation program as it applies to state employees, the General Assembly may wish to consider further changes to (its) structure and operation," Holland said in his report.
That is the understatement of the decade. Gov. Pat Quinn and legislators ought to blow the whole thing up and start over.
Holland's report found payments were made based on "data that was incomplete, inaccurate and inconsistent," claims were paid without sufficient documentation and inadequate systems were in place to identify potential fraud.
And that's just the tip of the iceberg.
Legislators ordered this audit following reports by a St. Louis-area newspaper outlining a worker's compensation epidemic at Menard, a contagion that went all the way up from prison guards to the facility's warden. A federal criminal investigation is reportedly under way.
Criminality is, of course, extremely serious. But the bureaucratic failure outlined in Holland's report is just as serious, even if in a different way.
Holland reports that Illinois taxpayers paid nearly $300 million to settle more than 26,000 claims filed between January 2007 and December 2010.
Employees at the corrections, transportation and human services departments accounted for 64 percent of the claims, with corrections and human services together making up 53 percent.
Sprains and contusions (bruises) accounted for 75 percent of the claimed injuries. Roughly one-third of the payments went to medical providers while most of the remainder went for settlements or temporary disability payments.
What the audit reveals is an overwhelmed system where arbitrators simply hand out money for claims that may or may not be legitimate to make cases go away, a process that seems to be completely ignored by state overseers.
Here's one breakdown in oversight. Overloaded arbitrators, who are supposed to receive annual performance reviews, receive no performance reviews.
The responsibility for workers' compensation also is spread, allowing one agency to blame another for shortcomings. Central Management Services is supposed to administer workers' compensation, the Workers' Compensation Commission is the administrative court system to resolve disputes. Finally, it's Attorney General Lisa Madigan's job to represent the state before the Workers' Compensation Commission.
This report is terrible news, but it comes at a good time. Given Illinois' precarious finances, Gov. Quinn and legislators should have proper motivation to make dramatic changes. There will be no good excuse if they do not take bold action.