Chicago's WC Defense Program Now Facing Federal Subpoenas

Wednesday, August 22, 2012 | 0

The Chicago Tribune reports the City of Chicago’s $115 million-plus-per-year workers' compensation defense program is going to be the subject of a federal investigation. We assert there is no municipality on the planet that pays $115M per year in workers' comp benefits — if you know of one, please send it along and we will donate $100 to your favorite charity. The feds have asked for six years of records to try to find out why Chicago is paying triple or more of what the rest of the similar-sized cities across the U.S. pay for their annual workers' comp tabs.
 
The federal grand jury subpoenas demand access to the municipal program's database and a host of other records, including injury records, medical assessments and claim investigation records dating to January 2006. They also call on the Finance Committee to turn over records showing the duties of staff members who run the program.
 
We note six years ago, the U.S. attorney's office subpoenaed similar records, but that probe has not resulted in any charges. The problem we have with all of it is the way the feds do everything in secret and sometimes nothing comes from such investigations.

Everyone is giggling to see the finance chairman has been able to keep the records from the City of Chicago’s inspector general by deferring it to his “Legislative Inspector General,” who has no workers' comp training or background and is certain to start his investigation in a year or three with a nebulous report to issue right before the next ice age.
 
We are asking our readers for your thoughts on what the feds should be looking for:
 
1.    Is it okay for the finance chairman to legally accept political contributions from attorneys on both sides of the city’s workers' comp program?
 
a.    Wouldn’t it be fascinating to see whether there is a strong correlation between plaintiff/petitioner firms that split the lion’s share of plaintiff/petitioner work coming from City of Chicago with how much those firms legally donate to the political war chest of the Finance Committee Chair?;
 
b.    Similarly, on the defense side, some of our readers feel it might be interesting to see how much some City of Chicago outside workers' comp defense firms legally donate to the same political war chest, who also happen to win referral of the hundreds, if not thousands of defense referrals each year;
 
c.    Why doesn’t the city’s outside workers' comp defense work go to open bidding or an request-for-proposals process like other governmental bodies routinely do? How are their workers' comp defense firms selected?
 
2.    Our readers feel someone should ask why does the City of Chicago workers' comp program have no pro se settlements? Is it their goal to have all workers go to a lawyer? Why don’t they ever hold a workers' comp “settlement day?”
 
3.    On the defense side, our readers and other observers also wonder why the City of Chicago outsources legal defense work limited to emergency petitions only and why such work is sent out to private defense firms but not supervised in any way like all other outsourced defense work for the City of Chicago — by the Corporation Counsel’s office;
 
4.    Our readers have asked how many City of Chicago workers are having indefensible “non-accident accidents” for claims like
 
a.    “Repetitive working” where there is no event of trauma;
b.    “Traveling employees” who are laughingly covered for any activity from the minute they leave their homes until they return again — this odd theory covers such workers for injuries occurring when they are off the clock and not being paid by the city at the time of the injury;
c.    “Mental trauma” or California-type mental stress claims arising from non-physical injuries but without sudden shocking events.
 
5.    We are wondering how many city workers are “odd-lot total and permanent disability claimants” who have the wonderful situation of being paid tax-free workers’ compensation total and permanent (T&P) benefits with cost-of-living increases for their entire life by the City of Chicago because the city will not bring them back to work with reasonable accommodations as required by the federal Americans with Disabilities Act. No employee is beefing about lack of accommodation under federal law because they are getting Illinois generous tax-free awards! All such claimants could be returned to work today and workers' comp benefits terminated, if the city would have the guts and brains to do so. Please note we have been advised the state of Illinois has about 700 such “odd-lot total and permanent disability claimants” who are costing state taxpayers about $7 million every year. Please further note this is the coolest possible “pension” in a state full of questionable government “pensions” because every City worker is eligible to be an “odd-lot T&P” the first minute they start work, there is no waiting or “vesting” period.
 
6. How many City of Chicago workers are off all work and being paid temporary total disability every day of every year? We have been advised there are departments that have 10-30% absentee rates with almost all of the workers off due to “injuries” the City doesn’t investigate, doesn’t manage, let’s go to attorneys with protracted litigation and then settles for high values; all to the detriment of taxpayers.
 
7.    Is it possible the City of Chicago has one workers' comp adjuster for 3,000 pending claims? Is it possible the City of Chicago has one in-house defense lawyer for the same number of claims?

Eugene Keefe is a founding partner of Keefe, Campbell & Associates, a workers' compensation defense firm in Chicago. This column was reprinted with his permission from the firm's client newsletter.