Mayor Lori Lightfoot recently announced that the city would be transferring control of the Chicago workers’ compensation program to a private company. The $100 million-per-year program had been overseen for decades by now-indicted Alderman Edward Burke.
Chicago Workers’ Compensation Program “Antiquated”
The decision to overhaul the Chicago workers’ compensation program was announced on June 13, 2019. According to the mayor’s office, a recent audit performed by an outside firm found that the city’s program did not operate according to industry best practices. Its staff members were not adequately trained, it lacked key protections against fraud, and it did not have “comprehensive policies and procedures governing claim handling, which can lead to inconsistent claim outcomes for workers.”
“While other cities across the country have long ago reformed and professionalized their own programs,” Mayor Lightfoot told reporters, “here in Chicago we continue 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 city will transfer day-to-day operations of the Chicago workers’ compensation program to Gallagher Bassett, an international public sector claims firm, though the mayor added that a final contract agreement has not yet been reached.
Closely Controlled, Shrouded in Secrecy
Most cities’ workers’ compensation programs are overseen by their law or human resources departments. The Chicago workers’ compensation program, however, had been closely controlled for more than three decades by Alderman Edward Burke, the former City Council Finance Committee chairman.
Burke had reportedly kept the operations of the Chicago workers’ compensation program under wraps throughout his tenure, blocking efforts to examine its workings. In 2012, for example, Burke denied Inspector General Joseph Ferguson access to records related to the Chicago workers’ compensation program to review it for waste and inefficiency, contending they fell outside Ferguson’s jurisdiction. Federal subpoenas for the program’s injury records, database, medical assessments, and claim investigation records also appear to have been blocked.
The veil of secrecy first began to slip in November 2018, when federal agents raided Burke’s City Hall offices, and then again in early January, when federal prosecutors charged Burke with attempted extortion for allegedly trying to shake down Burger King franchise owners. In response, Mayor Rahm Emanuel removed control of the Chicago workers’ compensation program from the Finance Committee and placed it under the control of the Finance Department instead.
“Potential Fraud, Waste, and Abuse”
The auditors wrote that the Chicago workers’ compensation program “is in need of substantial improvement to operate more effectively as well as prevent and detect potential fraud, waste, and abuse” and argued that most claims were not in compliance with rules or internal claim administration guidelines.
The report also concluded that the Chicago workers’ compensation program was operating without any fraud risk policy, did not offer anti-fraud training, lacked an anonymous fraud tip hotline, did not conduct fraud awareness initiatives, and did not have “documented policies or procedures to ensure consistent, reliable investigations.”
The auditors recommended establishing a fraud risk management policy, annual anti-fraud training, and guidelines for regularly analyzing claims “for the identification of unexpected changes over time.”
Mayor Lightfoot called the audit “a pretty damning indictment of how this program is administered. There’s I think virtually no point on which [the auditors] believed this program was operating anything close to best practices.”
More Than 600 Claims a Decade or More Old
The mayor also cited the review’s findings that there were nearly 1,300 open workers’ comp claims – about 600 of them a decade or more old.
“The fact that we’ve got these decades-old cases and we’ve spent about $300 million and these claims are still unresolved, meaning there’s still a potential additional payout on top of that, doesn’t make sense,” Mayor Lightfoot said.
She added that the system Burke ran “was ripe for corruption,” and that “a program 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.”
About the reform, Lightfoot said “Over time, there’s no question it’ll save us substantial sums,” though she did not know the extent of possible taxpayer savings because of startup costs for modernizing the Chicago workers’ compensation program.
How Will This Overhaul Affect My Claim?
It is still unclear what impact the coming overhaul to the Chicago workers’ compensation program may have on claims brought by injured city employees. In times of uncertainty, it helps to have somebody knowledgeable on your side, somebody you can trust to guide you through an often intimidating process when you and your family need it most. In short, it helps to have the Chicago workers’ compensation attorneys at GWC Injury Lawyers.
As one of the leading Workers’ Compensation and Personal Injury law firms in Illinois, GWC has fought tirelessly for more than four decades on behalf of thousands of injured workers in both the public and private sectors to bring them the justice they deserve. And with more than $2 billion recovered for our clients, we think our record speaks for itself.
If you have been injured while working for the City of Chicago, contact GWC today to schedule a no-cost, no-obligation consultation with one of our experienced, dedicated attorneys. Call our office at (312) 464-1234 or click here to chat with a representative at any time.
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