WORKERS' COMPENSATION PROGRAM NORTH CAROLINA INDUSTRIAL COMMISSION Recommendation Follow-Up

Transcription

1 WORKERS' COMPENSATION PROGRAM NORTH CAROLINA INDUSTRIAL COMMISSION Recommendation Follow-Up RECOMMENDATION The agency should develop a comprehensive internal policies and procedures manual as well as step-by-step procedures for each section within the Commission. These manuals will serve as a reference guide. A standard procedure for updating and distributing should be developed. Management should require strict adherence to the policies and should apply them consistently. Partially implemented 60% complete (Explain below) The Industrial Commission has a detailed document "Navigating through the Industrial Commission" which outlines duties and procedures for each section of the Commission. The Commission's Electronic Document Management System provides detailed procedures outlining instructions to each employee concerning the handling of workers' compensation claims. The agency has not developed detailed flow charts available to all employees outlining the procedures to be followed by individual sections of the Commission in administering the contested claims process. The agency also distributes policy memorandums which are maintained in a central administrative area and available for each employee to review. As a result of studies and needs assessments, the Commission is waiting until the final implementation of a specific data collection system to prepare an indepth procedures manual. 1

2 The Commission should continue to request from the General Assembly additional resources to meet its data processing needs and reduce its reliance on costly outside sources. We recommend the addition of two analyst programmer positions ($121, in total annual salaries and benefits). Partially implemented 50% complete (Explain below) Since 1997 the Industrial Commission has received funding for an Applications Programmer I position and two Computer Support Technician I positions. An existing Applications Programmer position was eliminated during the 1997 "budget reductions" in the General Assembly. The three new positions were established to allow the agency to become less reliant on outside contractors. However, these positions were funded at the minimum level and the agency has very limited salary reserves. Consequently, we have had difficulty filling the Applications Programmer position as a result of the private sector's higher pay levels. The agency has cut back considerably on contract help in the data processing area as our employees have become more proficient. However, the agency will continue to ask for additional budget support for data processing services. 2

3 The Data Processing section should concentrate its efforts on redesigning programs to adequately capture and report statistical information. The report designs should be standardized to ensure consistency of data reported, and a log should be maintained showing changes in reporting methodology whenever this occurs. In addition, section heads should be responsible for verifying statistical data and maintaining copies of statistical reports. Partially implemented 35% complete (Explain below) The Commission retained the services of three noted authorities in workers' compensation research to study and make recommendations concerning our statistical needs. They prepared a report on the agency's statistical and data collection capabilities and made recommendations for the Commission's consideration. The Commission has moved to discontinue the collection of "closed case" data and is in the process of initiating collection data on an "as reported" basis. In addition, the State's Information Technology Services conducted a Needs Assessment for the agency, outlining specific business line applications, software and database needs. Both studies will require funding for implementation. 3

4 The Commission should clearly define the backlog. We believe the backlog should be revised to include only cases not set for hearing and the cases where opinions and awards are overdue. All remaining cases should be considered as active files within the normal operations of the formal hearings process and tracked accordingly. Due to the overwhelming success of the Commission's mediation program and the diligent, hard-working efforts by the Deputy Commissioners in , The Commission currently has no hearing backlog. Once a hearing has been requested and mediation is either dispensed with at the request of the parties or unsuccessful, the case is recoded to 100 status and within two months is typically set on a hearing calendar to be heard by a Deputy Commissioner. The Commission uses the term "decision backlog" to describe those cases for which the formal hearing process is complete but the opinion and award has not been rendered within the established statutory period of 180 days from the close of evidence. The workplans for every Deputy Commissioner require the completion of opinion and awards within 120 days from the close of evidence. Thirteen of the current 18 Deputies actually hearing cases consistently meet the 120-day goal, five of the 18 occasionally fail to meet the goal. Seven consistently issue and opinion and award within days of the close of the record. 4

5 The General Assembly should consider granting the Commission statutory authority to impose sanctions when requests for hearings are filed but the cases are not ready to be heard. We support the Commission s effort in developing the regional team concept. To be most effective, the teams should establish detailed plans of action to identify how they will schedule and hear cases and to set goals for the team. These plans should provide the necessary information to document and evaluate the work performed by each team and individual team members. We recommend the Commission closely monitor the procedures and evaluate this plan quarterly to determine whether the team concept should continue. 5 Yes No t implemented (Explain below) The problem of attorney's requesting hearings when their cases are actually not ready to be heard has been resolved. Due to the elimination of the hearing backlog, attorneys have learned that the Deputies now hear cases very quickly. Therefore, attorneys have ceased the practice of prematurely filing Form 33 Requests for Hearings that was so common when the parties had a waiting period of up to several years before a case was heard. Not implemented (Explain below) The regional team concept has been very successful in eliminating the hearing backlog. The Commission continues to monitor and evaluate the progress of the regional teams in order to determine whether the team concept should continue. Several changes have been implemented since the inception of the team concept including changes in team leaders, reduction of regions and teams from the original five to three, changes in the length of rotations in each region, and some relocation of counties from one region to another so that caseloads are more evenly distributed.

6 We support the Commission s efforts to improve the timeliness of cases by expanding the mediation program. Written procedures should be developed and goals should be identified to evaluate the expansion of the program in six to twelve months. If mediation is successful in meeting those goals and reducing the caseloads on the hearing dockets, the Commission should consider reducing the number of Deputy Commissioners, training Deputy Commissioners in mediation to allow transferring of resources, or using Deputy Commissioners for other adjudicative functions. Specific Mediation rules have been developed and adopted. Mediation has improved the timeliness of contested cases. During the fiscal year, the Commission began referring all cases to mediation upon the filing of a Form 33 Request for Hearing. After completing a public notice and hearing process, new mediation procedures were developed in the form of revised mediation rules that were formally adopted by the Commission on August 20, Clearly, the success of the mediation program has reduced the number of cases on the hearing document. However, the cases remaining to be heard by Deputy Commissioners are extremely complex legally and factually, the hearings tend to take a much longer time, greater numbers of depositions of medical experts are being taken, and the parties are typically very contentious, particularly since the case may have already been through the mediation process. The Commission has considered training Deputy Commissioners as mediators but does not feel that this use of Deputies is feasible at this point. The Commission has also assigned additional tasks to Deputy Commissioners as needs have arisen in the agency. 6

7 The Commission should ensure the proper coding of each claim and the completeness of each claim file. All opinions and awards should be completed within the 180 day limit. The Commission should consider assessing penalties to employers that do not submit injury reports within the required time frames, and if statutory authority is needed to accomplish this, the General Assembly should consider such legislation. Yes No Partially implemented 50% complete (Explain below) The Commission has in place guidelines for the proper coding of each claim and the completion of all opinion and awards within 180 days. The Commission is publishing proposed rules which will be reviewed in rulemaking hearings, including a rule for allowing the assessment of penalties for an employer's failure to submit a timely report of injury. 7

8 The Statistics section should prioritize the closing of claim files. To accelerate the closing of claim files and improve claim file management, we recommend the addition of an administrative assistant position in the Statistics section ($28,600 in annual salary and benefits). Partially implemented 25% complete (Explain below) The Commission retained the services of three noted authorities in workers' compensation research to study and make recommendations regarding our statistical needs. As a result, the Commission has moved to discontinue the collection of "closed case" data and is in the process of initiating the collecting data on an "as reported" basis. In addition, the State's Information Technology Services conducted a Needs Assessment for the agency. Both studies require funding for implementation. The agency will continue to ask for additional budget support for statistical reporting services. We have not been successful in seeking additional positions for the statistics section. 8

9 The General Assembly should consider eliminating the tie-in of workers compensation inpatient hospital charges to the State Health Plan and returning the responsibility for setting these fees to the Commission. The Commission should develop a reimbursement method for inpatient hospital charges that disallows charges over 100% of the itemized bill. Yes 97-26(a) (1),(2),(3) 1997 No The General Assembly considered eliminating the tie-in of workers' compensation inpatient hospital charges to the State Health Plan but chose instead to make the tie-in more palatable by (1) capping all DRG's at 100% of the hospital bill and (2) establishing a band at the low end of which was originally set at 90% of the hospital bill and decreeing that the DRG charge would apply if it fell between the 90% and 100% This methodology was in effect from July 1, 1997 through December 31, Thereafter, a methodology was established that was designed to give workers' compensation hospital bills the same discount as experienced the preceding year by the State Health Plan. This methodology is satisfactory to the Industrial Commission and to those affected by it and has worked satisfactorily since it went into effect.. 9

10 Commission management should institute procedures to ensure all personnel are properly informed of the State Budget Manual requirements concerning travel. Additionally, the Commission and the Department of Commerce-Fiscal Management should review the controls in place for weaknesses that have allowed the errors noted. For costs that were improperly reimbursed ($519.07), management should request employees repay the Commission. The Safety Director s duty station should immediately be changed to Raleigh. The Commission should discontinue reimbursing him for commutes from his home to his primary work site. Commission management should institute procedures to review and approve the designation of employees homes as duty stations on an annual basis to comply with GS 138-6(a)(1). The Commission issued copies of "Fiscal Management Guidelines" and a memorandum dated November 15, 1996 outlining "Travel Reimbursement/Budget Authorization/Private Vehicle Authorization/Meal Reimbursement" procedure. The Administrator updates this on a regular basis and holds meetings with all individuals who travel to discuss these requirements. This information was last updated on December 13, Not implemented (Explain below) The Safety Director's duty station was immediately changed to Raleigh when discovered in the audit. In addition, the agency annually reviews the designation of employees' homes as duty stations. 10

11 Management should request OSP to undertake a position classification study to review the duties and responsibilities of the workers compensation nurses. Based on our review, the consultation and referral services performed by the nurses are proper administrative functions of the Commission. However, we question whether all duties as described by the nurses should be handled by the Commission. The direct case management functions may be more properly handled by private physicians and medical rehabilitation specialists responsible for the treatment of injured employees. During the spring of 1998 the Department of Commerce Personnel Office, along with OSP, conducted a classification study for all worker's compensation nurses. This study determined that a range revision was necessary in order to bring these positions more in-line with other State government nursing classifications as well as similar positions in the private sector. This range revision increased the salary grade for all workers' comp nurses from grade 69 to 72. Effective April 1, 1998, a temporary Special Entry Rate was established so that salary increases could be implemented with funds that were available before the end of that fiscal year. The actual range revision and Special Entry Rate were approved by the State Personnel Commission and implemented effective August 1, In regard to case management functions, private sector medical and vocational professionals provide direct case management. Industrial Commission workers' compensation nurses become involved in cases only in the event difficulties arise which interfere with the ongoing progress of returning injured workers to their maximum physical capabilities. 11

12 The Medical Fees section should be reduced by three positions to correspond to the reduced workload. This staff reduction would provide savings of $83,655 in salaries and benefits. However, some of these positions could be transferred to other sections within the Commission where additional personnel are needed. Management should evaluate the revised use of the legal secretaries. Based on workload and the redefined duties, we believe an appropriate staffing level would be three legal secretaries for each team of four Deputy Commissioners. This would allow for a reduction of five positions and would save $152,653 annually in salary and benefits. If not needed to support the Deputy Commissioners, these positions could be transferred to other sections within the Commission where additional personnel are needed. These reductions were accomplished to comply with mandated budget cuts. The General Assembly eliminated during FY97-98 the salary and fringe benefits of the Processing Unit Supervisor as part of the reductions resulting from the "span of control study." In addition, one Processing Assistant IV was eliminated in FY97-98 and another in FY98-99 as part of across the board budget cuts by the General Assembly. t implemented (Explain below) As a result of the impact of mediation, the Commission is currently considering the team approach for assignment of legal secretaries as recommended. 12

13 The General Assembly should consider transferring the Safety Education section to the Division of Occupational Safety and Health in order to consolidate business-related safety training courses offered by the State. This should improve concentration of efforts towards high risk employers since OSHA already has procedures in place to target those employees. Yes No t implemented (Explain below) The Industrial Commission disagrees with the Auditor's recommendation. The House Appropriations Committee's Natural and Economic Resources Subcommittee has debated such a transfer and rejected the proposal on several occasions. There are differences in the mission and function performed by the Industrial Commission's Safety Education section and the Division of Occupational Health and Safety in the Department of Labor. The Safety Education section concentrates on the safe performance by employees of job related tasks. OSHA concentrates more on worksite and workplace machinery safety. 13

14 If the Safety Education section remains within the Commission, the section should take a more proactive approach by utilizing information collected by the Commission about employers with high accident rates and then targeting these employers. The Commission should develop a joint plan with ETTA for training both employers and employees in businesses which have a high number of workers compensation claims. Partially implemented 50% complete (Explain below) Each January, the Safety section makes a mailing to every individual and group on the mailing lists of the eight statewide safety councils. The safety council mailing lists contain approximately 6,000 names of employees/employers with address information. The Commission has worked during the past year with the Labor Department to better target high accident rate employers. However, the use of closed case files presents difficulty. The Industrial Commission will use the final list of "high accident rate employers" as prepared by the Labor Department to target for additional safety training and other available safety assistance. Partially implemented 30% complete (Explain below) The two agencies are working together to better determine "high risk" employers. The development of a statistical system based on "current claims filed" will be most beneficial in identifying these companies. The earlier a problem can be identified, the greater the chance of providing meaningful safety education and assistance. 14

15 The General Assembly should consider transferring the workers compensation fraud investigation function (consisting of two investigator positions) to the Department of Insurance to eliminate the potential for duplicated investigations. To ensure workers compensation cases are adequately investigated, any positions transferred should remain devoted to workers compensation fraud. All suspected workers compensation fraud should then be referred by the Commission to the Department of Insurance. To remove the appearance of bias, the Commission should develop and implement standardized procedures for the interviewing and hiring process. We recommend using a three person committee to conduct interviews, the use of standardized questions, and a ranking of candidates forwarded to the Administrator for his review and approval. Copies of the ranking sheets and interview questions should be maintained in the personnel file of the hired applicant as well as in the position applicant file. 15 Yes No t implemented (Explain below) The Industrial Commission continues to disagree with this recommendation. When the workers' compensation fraud statutes were enacted in 1994, responsibility for investigating workers' compensation fraud cases was given to the Department of Insurance; however, a year later, the General Assembly amended NCGS and directed the Industrial Commission to investigate its own workers' compensation fraud complaints. The Industrial Commission continues to work closely with the Department of Insurance to eliminate the potential for duplication of investigations. Not implemented (Explain below) The Industrial Commission has adopted the Department of Commerce's Human Resources Division's Guidelines for standardizes procedures in interviewing and hiring employees. Group interviews have been conducted since suggested for positions that are highly technical or top management. The Administrator reviews all interview forms and conducts a final interview followed by a "hiring conference" at which time salary and other details are discussed.

16 The Commission should follow the grievance policy and procedures established for the performance management system. Any changes made to the evaluations should be supported with adequate written documentation The Commission should comply with OSP policy regarding the time limit for temporary employment. To ensure compliance, the Commission should develop a system for tracking the hire dates of temporary employees. The agency follows the grievance policy and procedure established for the performance management system. It is the agency's policy that any changes or comments to evaluations be documented in writing. The Auditor's concern was the result of an isolated incident by the Commission's former chairman. No such incident has again occurred. Not implemented (Explain below) The Auditor's concern about temporary employees arose at a time the General Assembly was appropriating the Industrial Commission non-recurring funds to hire temporary employees to assist with the backlog. Such funds are no longer received and an extremely limited number of temporary employees are now utilized, utilizing lapsed salaries. 16

17 In our opinion, the processing of state agency claims should be centralized either (1) within an existing state agency such as OSP or (2) by outsourcing services with a private third-party administrator. The State should closely evaluate the pilot project and its future costs when determining the appropriate method for centralized claims processing. Centralization would ensure consistent application of the workers compensation law to all State employees and provide a knowledge base for more effective claims administration. t implemented (Explain below) The Commission agrees in large part with this recommendation. There is a great deal of inconsistency within state government in workers' compensation claims handling and centralization could lead to more effective and consistent administration of claims. However, we are hesitant to agree with outsourcing with a third party administrator. Some of these groups have policies and procedures that are incompatible with fair and cost effective practices. Since the Industrial Commission is the agency that adjudicates workers' compensation claims, it would be inappropriate for us to lead any effort to rearrange state practices in this area. 17