Workers Compensation Program

Recommendations 13

• R1
  In light of the financial disincentive to return to work these practices create, the City should determine whether it is in the public's best interest to continue providing full salary continuation and salary supplementation benefits.
• R2
  The City should, at a minimum, discontinue all salary continuation or supplementary benefit practices which result in employees' receiving a higher net income when not working, an obvious disincentive to return to work. Use of Department Budgets to Provide Incentives to Reduce WC Costs Each year, City funds are allocated to departments to pay for WC benefits and services according to a formula which gives most weight to a department's actual claims experience. All departments are expected to keep their expenditures within budgeted amounts, but if WC costs for a department exceed the amount budgeted, the department's budget is simply increased accordingly. On the other hand, if a department reduces its WC costs by better managing its WC claims, or by starting an effective injury and illness prevention program, and therefore spends less than the amount budgeted for WC, all the saved monies are returned to the general fund.
• R3
  The City should develop a financial incentive program to recognize exceptional efforts or outstanding accomplishments made by departments to contain or reduce their WC costs. The City should reward departments that show positive results from cost containment efforts by allowing them to retain in their budgets a portion of the monies saved. Departments should be permitted to use the retained funds to enhance or expand WC cost-containment practices, or to support other department activities not directly related to WC.
• R4
  The City should consider setting aside funds to support a citywide financial incentive program to reward cost-containment and -reduction success in the WC program. All organizational units or individual employees in any department should be encouraged to participate in such a financial incentive program. Following established criteria, the program should recognize exceptional efforts or outstanding accomplishments in containing or reducing WC costs. Return to Work Programs (Modified Duty Program) An effective Return to Work (RTW), that is modified duty, program is widely acknowledged by both public and private sector WC executives to be an essential component of any effort to control WC costs. RTW programs provide temporary work assignments to employees who cannot perform their customary job duties as a result of a job-related injury or illness. In addition, job duties may be modified to accommodate an employee who is recuperating from an occupational injury or illness. Only a few departments have established RTW programs. [1] A department developing its own program must use whatever staff expertise and financial resources it can spare from its own budget. Creating a sufficient number of meaningful modified duty assignments for temporarily disabled employees within a single department is often a major problem. A citywide program would increase the number of potential job assignments available for temporarily disabled employees.
• R5
  The City should, at the earliest possible time, implement an effective, citywide RTW program similar to that developed by the Return-To-Work subcommittee of the City's WCTF. Experience clearly indicates that RTW programs reduce fraudulent claims and help employees return to their regular jobs faster. Furthermore, no additional costs accrue to the City for the work these employees perform. Contracting The WCD obtains a major portion of all the services required by the WC program through contracts with San Francisco General Hospital (SFGH), the University of California at San Francisco (UCSF), and a number of independent contractors. These contracts cost the City over $9,000,000 annually. SFGH and UCSF operate clinic facilities and emergency rooms for both the initial and continuing treatment of injured City employees. Private contractors provide administrative services: processing and adjusting approximately one half of all City WC claims; reviewing bills submitted by doctors and other medical service providers and maintaining networks of medical service providers offering discounted fees to injured or ill City workers. The WCD also makes payments for other medical treatment services and specialized procedures provided by practitioners not under contract with one of the City's medical service providers. In 1993 the WCD contracted with Noetics, now FIRM Solutions, to administer about one-half of all WC claims, with the WCD retaining responsibility for the other half. The decision to contract out was made because at the time it was seen as the quickest and easiest way to increase the number of staff available, to lower the average caseload per claims examiner and to handle an increasing number of WC claims. City officials expected that the efficiency and effectiveness of both systems of administering WC claims would be evaluated after two to three years, and a determination would then be made on whether to return all claims administration to the WCD or to assign all claims to a private contractor. For a number of years the WCD has retained a Vocational Rehabilitation Coordinator and a Medical Coordinator, who provide referrals to City workers and coordinate oversight of vocational rehabilitation and medical services for the City. The Coordinators are paid over $50 per hour. The City does not have a written employment contract with them and has never held open competitive bidding for these services.
• R6
  The WCD should regularly monitor, assess and audit all of its contracts in a consistent and formal manner to ensure that they are conducted effectively, efficiently, and in accordance with their terms and conditions.
• R7
  The City should evaluate how well the WCD and the current private contractor have managed their respective claims administration functions. Based on that evaluation, the City should determine whether in-house or contracted claims administration is in the best interest of the City and its WC program.
• R8
  The WCD should avoid long extensions of the termination dates of contracts which were once competitively bid.
• R9
  The positions of Vocational Rehabilitation Coordinator and Medical Coordinator should be evaluated by the WCD. If they are necessary, they should be properly classified and filled through the City's competitive merit system, or, if the City is best served by contracting for these services, an open competitive bidding process should be followed. REQUESTED RESPONSES Mayor Board of Supervisors Department of Human Resources Controller Civil Service Commission APPENDICES A. Information Reviewed B. Salary Continuation/Supplementation
• R10
  Description of Salary Continuation and Supplementary Benefits, WCD
• R11
  1996 SFUSD Risk Management and Risk Financing Study
• R12
  WCD's Management Information System Reports
• R13
  SF Public Transportation Department Quarterly Occupational Injury and Illness Report, 1996