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Chicago’s mayor plans to impose “sweeping” reforms to the city’s workers compensation program by partnering with insurer Gallagher Bassett Services Inc.
Mayor Lori Lightfoot on Thursday announced the city has contracted with Rolling Meadows, Illinois-based Gallagher Bassett to implement changes to the workers comp system that aim to improve services for injured workers and reduce fraud, waste and abuse in the administration of claims, according to a news release.
The reform announcement follows the completion of an independent audit of the city’s workers comp program by Chicago-based Grant Thornton LLP that revealed widespread deficiencies, a lack of training for administrators, insufficient fraud controls and a lack of clear policies to ensure consistency in investigations and claim administration.
Under Ms. Lightfoot’s plan, Gallagher Bassett will implement claim handling policies and procedures aligned with best practices, adopt new technology to expedite claims review and control costs, create a process for handling legacy claims and implement a comprehensive return-to-work program to increase closure rates, according to a statement from the mayor’s office.
The mayor also said Gallagher Bassett will work with city staff to drive down claims costs. In 2018, the city’s workers compensation program cost $98 million, according to the statement.
Although a date has not been announced for the official transitions, the mayor’s office said it will take place later this year. The workers compensation program will remain at the city’s finance department in the interim. Outstanding claims are not expected to be impacted by the transition, Ms. Lightfoot said.
Indemnity payments for injured workers increased as much as 9% from 2007 to 2014 in New York as a result of state reforms launched in 2007, according to a report released Tuesday by the Cambridge, Massachusetts-based Workers Compensation Research Institute.