(UPDATED: 4:15 p.m.) A trial lawyer who makes his living collecting workers compensation from cities found himself on the other side of the table—looking for a way New Haven can pay less than $9 million per year on employee injury claims.
The lawyer, Michael Stratton, found himself in that position at a recent meeting of the Board of Alders Finance Committee, to which he belongs as the newly elected alder for Newhallville/Prospect Hill.
At the Finance Committee meeting, Stratton expressed alarm at the amount the city has been paying for workers’ compensation claims, over $9 million gross annual expenses since 2009. He asked the Finance Department to consider contracting with a different claim administration company, to cut costs.
On Monday, city spokesman Laurence Grotheer responded to news of Stratton’s criticisms by issuing a press release stating that other cities in Connecticut pay the same or more for workers’ comp than New Haven. Bridgeport, for example has paid over $11 million each year for the last six years. Hartford has a workers’ comp budget for the current fiscal year that is half a million less than New Haven’s.
“We will continue to push for more savings,” city Controller Daryl Jones said in Grotheer’s release. “We’re on a path that is controlling costs while continuing to provide protection from injury for our police, fire, and other city employees. We’re not sure exactly where Alder Stratton is looking that he thinks these costs are ‘extraordinary’, but it’s definitely not the cities in Connecticut that face New Haven’s challenges.”
Mayor Toni Harp’s proposed $511 million budget includes a 3.8 percent tax increase. The budget is currently under consideration by the Finance Committee, which is expected to try to whittle away or eliminate the tax hike before the full Board of Alders votes on the budget at the end of May.
At its most recent hearing with heads of city departments, alders had the most questions for representatives from finance officials, who were last to testify.
“That’s a lot of money,” Stratton (pictured) said, as he looked at a year-to-year breakdown of workers’ compensation costs provided by budget chief Joe Clerkin. The gross claims expenses added up to $9.2 million last fiscal year, and are expected to hit $9.5 million this year. That total is offset somewhat by money the city can reclaim by, for example, billing someone’s insurance if he hits a city worker with his car. It’s also offset by grant money set aside to pay for injuries sustained by people working under grants to the city, and by catastrophic stop-loss insurance if a workers comp claim costs enormous amounts of money.
New Haven officials have tried for years, with some success, to cut workers’ comp costs. The issue flared up in last fall’s mayoral campaign, when a principals of a prominent firm booted for lying about a worker’s condition funneled money to the Harp campaign. Click here to read about that.
By the 2009-2010 fiscal year, annual workers’ compensation claims had doubled in under a decade. A City Hall working group succeeded in lowering that rate of increase since then and is continuing to target fraud. It is also pursuing a policy of finding more light-duty assignments for employees with physical injuries rather than have them remain out of work altogether.
The DeStefano administration offered different numbers than were presented Thursday night. Last year, city officials said workers’ compensation claims cost the city $11.4 million in that peak 2009-10 fiscal year, according to the city. The figure dropped to $9.6 million in the fiscal year that ended last July.
“Have we contracted this out? Or are we doing it in house?” Stratton asked Clerkin at last Thursday’s hearing.
The city contracts with CIRMA as a “third party administrator” that manages “case intake,” Clerkin (pictured) said. CIRMA processes, verifies, and follows up on all of New Haven’s workers’ compensation claims. And one person in the Finance Department oversees CIRMA’s work for the city.
“Do they stay on the history of claims?” Stratton asked. Do they visit people in the hospital and follow up on their allegations of sickness or injury?
Yes, Clerkin replied.
“These are very extraordinary workers’ comp numbers,” Stratton said. “I can’t imagine anybody paying much more than what we pay.”
Stratton said that, as a lawyer, he has seen workers’ compensation settlements decrease in recent years, while New Haven seems to be paying more.
If the city has a third-party administrator, why are city staff also working on it? Stratton asked.
Workers’ comp claims are “extraordinarily complicated,” Clerkin said. Because of the complexity and the long duration of the claims, the city needs to have a single person overseeing compensation. “He’s worth his weight in gold.”
“He really does a lot of work,” said Controller Jones (pictured). “I work 10 or 11 hours a day and he’s always there.”
“As well as he may be doing, the numbers are extraordinary,” Stratton said.
He asked Clerkin and Jones to see what other cities are paying for workers’ compensation, and to get alders a breakdown of exactly how much the city is paying the third-party administrator.
Stratton said after the meeting that he’s “very worried” by the city’s workers’ comp costs.
He said the city should find a workers’ comp company that would root out malingerers. “When you’re really aggressive, people just want to go back to work.”
More aggressiveness would be better for workers in the long run, he said. People who are out on workers’ comp for less than rock-solid reasons end up getting unnecessary operations and get addicted to painkillers, Stratton said.
The city needs to protect people who really are legitimately injured, however, Stratton said. “They shouldn’t be hassled.” And they should be fully compensated.