State Workers’ Compensation Program Advisory Board Meeting, February 28, 2023
The State Workers’ Compensation Program Advisory Board held its meeting February 28, 2023 via Webex. In attendance were Jack Engle (Chairperson), Ken Werts (Senate Minority Leader Appointee), Kevin Botha (Senate President Appointee), Michelle Porro (Speaker of the House Appointee), Michael Brennan (Workers’ Compensation Commission), Ronald Rascia (Workers’ Compensation Commission), Jim Nichelson (REV), Laura Hammann (CMS Risk Management), Nicole Featherstone (CMS Risk Management), Joli Schroeder (CMS Risk Management), Jim Sterr (DOT), Justin Hammersmith (DOI), George Sweeney (DOI), Patrick Nolan (CMS), Raven DeVaughn (Director CMS), and Richard Glisson (OAG).
Jack opened the meeting with an announcement that as of February 1, 2023 the State of Illinois has a new third-party administrator (TPA) handling our Workers’ Compensation claims. In June 2022, an RFP was issued which resulted in three successful bidders, after a protest was withdrawn by the 2nd place vendor an award was made to the highest qualified bidder, Gallagher Basset, in November 2022. As of last week, all data has been transferred from TRISTAR to Gallagher Basset. While there are some minor issues with some data such as photos and comments not appearing, these issues are being addressed. A total of 5,428 open claims and 193,475 closed claims were transferred.
In preparation for the transition and data transfer, temporary disability payments were advanced through March 15, 2022. The State of Illinois still has access to view the TRISTAR system in the case of any unique situations in which the information cannot be located in Gallagher Bassets system. Additionally, a notice of the TPA change was sent to all employees and legal counsel on open claims. There is one final meeting with TRISTAR to discuss any data errors that occurred.
Since the award was issued, the claims manager at Gallagher Basset has assembled a team of 39 to handle claims; 30 Resolution Managers (Claims Adjusters), 6 Supervisors, 1 Assistant Branch Manager, 1 Branch Manager, and a Program Manager. The previous TPA only had 26 employees in comparison. CMS Risk Management has met the majority of the new TPA team and Jack indicates the lowest tenure employee holds 7 years’ experience with most employees having nearly 20 years’ experience. Since the transition we have encountered a few issues which have been resolved quickly and on an individual basis with CMS.
Jack moved on to discuss the RFP process and how the creation of the RFP focused on identifying deficiencies and opportunities for improvement with the prior TPA. The goal was to identify a trusted partner to help manage the Workers’ Compensation program. This includes ensuring that our employees are afforded high-quality care and claims service. And, equally important, the State of Illinois can benefit form increased efficiency, transparency, and data analytics to demonstrate quality outcomes and areas for improvement. Jack mentioned his commentary from the previous meeting in which he questioned the integrity of data that was provided by the previous TPA and advised how the information will be corrected in this new era. Gallagher Bassets system is far more powerful and robust.
Jack briefly discussed Gallagher Bassets history including that it is based in Rolling Meadows, IL, it is a Fortune 500 company, and was one of the earliest third-party administrators. Gallagher Basset ranks as the highest rated TPA in claims satisfaction by Advisen and is one of the largest, most-tenured and capable TPAs. They handle Workers’ Compensation claims for Connecticut, Oklahoma, Nebraska, and the City of Chicago.
The three core areas that separated Gallagher Bassett from the competition are as follows: (1) they are a high character organization which was shown in their company history and experienced claims handlers who strive to return an injured worker to the workplace in the most efficient and cost effective manner; (2) they have innovative claims solutions which was demonstrated in their proposal as they use a proactive approach at initial intake by having a nurse screen the intake call and determine if immediate care is needed, they provide recommendations for high-quality medical providers based nature, extent, and location of the injury, they record calls for quality assurance, and they have expansive and responsive IME referrals (3) and lastly their superior data analytics allows them to address issues and opportunities for improvement. Jack noted the new system, LUMINOS, will allow immediate 24/7 access to claim files and is significantly easier to navigate than the system utilized by the previous TPA. Additionally, reports that were previously created and provided by the TPA will be able to be run by agencies themselves and will be customizable.
Jack advised that by next week agencies should have access to LUMINOS and by mid-March there will be a coordinator training on the new system. Additionally, the Attorney General’s Office will have access to LUMINOS which will make it easier to prepare for trial and pulls records for subpoena responses.
Jack opened discussion for any questions regarding Gallagher Basset and the transition. Jim Sterr brought up a persisting issue with the previous TPA regarding the administrator not knowing what documents were being sent to the physicians for Independent Medical Examinations (IME). This in turn creates an opinion based on the documents and the exam but we do not know what documents went into forming that opinion as the TPA was not logging that information. Jim asked that we address this with Gallagher Basset from the beginning to prevent the issue from continuing. Nicole Featherstone advised that this issue had already been presented and Gallagher Basset is going to create a tab which will have the IME and all the records. Richard Glisson also advised that Gallagher Basset is going to reach out to the provider prior to any exam to verify the provider has all the necessary records ahead of time.
Jack advised that we should have a few members of the Gallagher Basset team at the next meeting and they will be able to speak to the attendees. Additionally, he indicated that Gallagher Basset has agreed to 150 hours of safety analysis for free which will include a tour of facilities showing a high frequency of claims. Jack and Jim both agreed that such a presence should curve the frequency of some claims and allow safety and prevention of those high frequency injuries to be targeted. Next, Jack discussed fraud within Workers’ Compensation and advised that at this time fraud has not been addressed with Gallagher Basset but they do have their own fraud unit.
Jack moved on to present CMS Risk Management updates which include a new Workers’ Compensation Manager who starts March 1, 2023 and advised the subrogation results are trending greater than expected. In calendar year 2022 we had over $3.3 million in subrogation recoveries and in fiscal year 2023 (to date) we have had almost $1.9 million which will be over $2 million when the check is received for a recently negotiated settlement.
In the next Advisory Board meeting, likely in May, Jack intends to invite the Gallagher Basset team including the account manager to share some of their early findings. Jack concluded the meeting with a summary of the next steps moving forward which include establishing our performance metrics and survey as well as performance guarantees.
The next meeting will be in May and Jack will have his report prepared for the new Director Raven DeVaughn by the end of May.