Item #4 Overview of Workers Compensation Presentation — original pdf

Backup

Overview of Workers Compensation at the City of Austin Public Safety Commission August 2024 1 History of Workers Compensation in Texas • A form of workers compensation started in Texas in 1913 or so, with many changes through the 100+ years of its existence in Texas. • What is it generally? • Workers Compensation (hereafter “WC”) provides benefits to workers that are injured or become disabled as a result of their job. • Texas is the only state where WC is optional for an employer, though it is mandatory for public employers and those entities that have a contract with a public employer. 2 Workers Compensation at the City of Austin • Most private companies pay an insurance company an annual premium to handle their WC claims, much like they pay for car insurance and liability insurance. • If you meet the eligibility requirements to be self-insured in Texas, you can provide WC insurance without purchasing private insurance. • Unlike most private entities that go out and purchase WC insurance, and most public entities in Texas do not purchase private WC insurance, they are instead self-insured. • Self insured employers have the same rights and responsibilities as those that purchase private insurance. 3 Workers Compensation at the City of Austin • The City of Austin is self insured for WC for its employees. • While most Cities in Texas are self insured, there are still administrative logistics that are very detailed that must be complied with for processing worker’s compensation claims. • There are various 3rd Party Administrators (hereafter “TPA”) that provide an expertise in processing WC claims, and the City has had various TPA’s process WC claims over the years. • The current TPA for the City of Austin is “Sedgwick”. 4 Workers Compensation at the City of Austin • At the City of Austin, Sedgwick is the TPA for all employees, not just the public safety personnel. • However, as is expected, WC claims are higher for the departments where more physical exertion is required as opposed to desk jobs. • Our highest raw number of claims comes from the public safety departments. 5 State of the current contract with Sedgwick • Our current contract with Sedgwick is set to expire in March of 2025, and the COA had conducted a RFP process to find a new TPA for a new multi year agreement. • However, we have heard many concerns about the WC process at the City and we wanted to halt the process to see if we had an opportunity to review the concerns and see what avenues were open to the City to make our WC process easier and more efficient for our employees. 6 Workers Compensation at the City of Austin • Overall, the vast majority of claims are approved • Here are some numbers from our larger departments as far as WC claims and their approvals: AFD Data Calendar Year 2021 Calendar Year 2022 Calendar Year 2023 Total Claims Received Total Claims Denied % of Claims Denied 1080 50 4.6% 1367 39 2.8% 636 84 13.2% 7 Workers Compensation at the City of Austin • Overall, the vast majority of claims are approved. • Here are some numbers from our larger departments as far as WC claims and their approvals: EMS Data Calendar Year 2021 Calendar Year 2022 Calendar Year 2023 Total Claims Received Total Claims Denied 285 37 268 38 160 28 % of Claims Denied 13.00% 14.20% 17.50% 8 Workers Compensation at the City of Austin • Overall, the vast majority of claims are approved • Here are some numbers from our larger departments as far as WC claims and their approvals: APD Data Calendar Year 2021 Calendar Year 2022 Calendar Year 2023 Total Claims Received Total Claims Denied 767 75 903 70 % of Claims Denied 9.8% 7.8% 425 68 16% 9 Workers Compensation at the City of Austin • Overall, the vast majority of claims are approved • Here are some numbers from our larger departments as far as WC claims and their approvals: Citywide Data Total Claims Received Total Claims Denied % of Claims Denied Calendar Year 2021 3072 Calendar Year 2022 3398 Calendar Year 2023 2239 242 7.8% 203 5.9% 243 10.8% 10 What are some areas of concern from the employees? • Some of the common concerns we have heard from employees and their union leadership are: • The complex injuries (neck, back) require more documentation. • The providing doctors get frustrated with the documentation required, causing some to wonder if it is worth providing care for WC claims. • Some employees allege that the TPA denies mental health claims more often than physical injury claims. • Better explanation of what’s needed (documentation wise) to proceed. • We need a better way of addressing the leave and compensation for employees that are out on WC leave. 11 What steps has COA taken to address concerns so far? • Want to emphasize this is a work in progress, we are certainly not done identifying issues and potential solutions. • We have had discussions with our TPA to relay the concerns we have heard so that we can see if the process can be improved on. • The TPA has agreed to try to make some of the language in the letters to the employee easier to understand and on the next steps that are needed. • We are in the process of doing a TPA audit. We also are looking to see what the ideal language should be in a new RFP when looking for a TPA. • We are in the process of changing the way compensation works for employees out on a WC leave. 12 Other possibilities to improve our WC process • Possibly contracting with a 3rd party that specialize in getting employees seen by doctors quickly after injury. • Enhancing some requirements for the next RFP for a TPA. • Possibility of creating the City’s own “physician’s panel” which may entitle the City to skip a lot of the processing technicalities that currently exist and allow the City to design a system that is more suited for the COA’s needs. 13 NEXT STEPS • Continue meeting with employees and their representatives and try to gain perspective on the issues they are encountering and find solutions • Working with other cities to see what is working for them and what is not – Ft. Worth is such an example • Ultimately, use all this information to rewrite our RFP for a TPA. • Implement wage continuation when Workday goes live (Dec. 2024)-will decrease overpayments and injured worker pay issues. • Pilot a service that works with the injured worker to navigate the system- with the goal of getting the injured worker healthy and back to public service. 14