Worker’s Compensation Program Review March 2013

Audit Date: April 3, 2013
Audit Categories
  • Other
Controller: Alan Butkovitz
Audit Tags
  • Employee Benefits,
  • Finance,
  • Risk Management

Executive Summary

For Immediate Release:
April 3, 2013

Contact: Harvey Rice

Butkovitz Finds Increasing Workers’ Comp Costs Total $54 Million
City Controller’s audit discovers excessive physical therapy treatments
& multiple claims by employees contributing to increasing costs

Workers’ Compensation Program Review – March 2013

PHILADELPHIA – City Controller Alan Butkovitz today released an audit of Risk Management’s Workers’ Compensation Program that found it cost the City $54 million in 2011, an increase of 26 percent since 2007. Excessive use of physical therapy by employees was a significant contributor to the higher costs.

From 2007 to 2011, physical therapy costs have risen 35 percent to $4.4 million. In 49 of the 165 open claims tested, the Controller’s Office noted claimants making 30 or more visits to physical therapy, which spanned up to 15 months beyond the date of the injury.

According to Butkovitz, these visits are well beyond the average three-month standard regimen after which a physical therapist will release a patient from physical therapy.

“The number of visits, and inherently the costs were staggering,” said Butkovitz, at today’s press conference. “Not only has this led to higher medical expenses, but also it has allowed employees to collect benefits under the Workers’ Compensation Program much longer than needed.”

In addition, during testing, the Controller’s audit discovered there were 386 employees who filed 11 or more claims and 2,203 employees who filed five to ten claims during their respective employment. There were also four employees that had two claims open simultaneously.

“We found that some city employees have a history of filing several workers’ comp claims,” said Butkovitz. “Risk Management needs to identify these employees who are filing multiple claims and consider enrolling them in a vocational rehabilitation program or assigning them to modified duty.”

Some of the additional audit findings included the following:
• A major concern with the length of time cases are left open after the employee has been discharged, which leaves the city susceptible to additional medical and indemnity costs.
• Significant delays in performing and evaluating Independent Medical Examinations, which is costing the city because the claim is left open longer.
• Several instances where MRIs were being ordered for claimants less than four-to-six weeks after the initial MRI, which medical literature demonstrates is unwarranted and of no or limited value.
• Employees who are making claims are not providing past medical records to assist in determining whether the treatment is for a current work injury or past injury.

“Risk Management needs to take a more proactive approach to investigating, overseeing, and closing workers’ comp claims in order to reduce the costs and exposure to the Program,” said Butkovitz. “The City cannot afford to allow current practices to continue and immediate action must be taken to address the findings in this audit.”