Lightfoot moves to reform infamous Chicago workers’ comp program

Chicago Mayor Lori Lightfoot called out Ald. Ed Burke after corruption indictments. Now she is reforming the city’s mismanaged workers’ compensation program that a lawsuit said Burke used to build a political army.

Chicago Mayor Lori Lightfoot announced major reforms June 13 to Chicago’s $100 million-a-year workers’ compensation program in hopes of controlling fraud, waste and abuse.

Results of an independent audit, released with the announcement, point toward significant issues with the city’s workers’ comp program.

“The findings of this audit revealed what we already suspected: that the city’s workers’ compensation program was undermanaged and lacked proper protocols – which poses a disservice to our injured city employees as well as taxpayers,” Lightfoot said.

Following federal corruption charges against Chicago Ald. Ed Burke and his resignation from the City Council’s finance committee, fellow aldermen moved to relinquish control of the program to the Department of Finance. Burke had been in charge of the workers’ comp program for decades, fighting off attempts at transparency and oversight, including by the city’s inspector general.

A 2018 lawsuit claimed Burke used the program to build a political army, including hiring unqualified workers such as a dog walker, hairdresser and waitress to run the costly program.

Former Mayor Rahm Emanuel ordered a forensic audit of the program in January. The independent audit determined the workers’ comp program “is in need of substantial improvement to operate more effectively as well as prevent and detect potential fraud, waste and abuse.”

Grant Thornton, the firm conducting the audit, essentially determined there are little to no processes for fraud management inside the city’s program. They ranked the program with organizations whose fraud risk management processes are “disorganized, even chaotic” and “undocumented and in a state of dynamic change.”

The audit found there were almost 1,300 open workers’ comp claims, and 600 of those are decades old. The unresolved claims have cost the city $300 million, Lightfoot said.

Lightfoot has directed the city to partner with a third party to implement reforms recommended by the audit. Lightfoot outlined the four points of reform:

• Align claim handling practices and procedures with best practices, such as establishing reporting periods and consistent review processes
• Adopt new technology systems to expedite claims review and control medical costs, as well as improve outcomes for injured patients
• Clear workers’ comp backlog through new process for handling legacy claims
• Implement a comprehensive “return to work” program to increase claim closure rates

“There’s almost nobody in city government outside the [workers’ compensation] program that knows how it works,” claimed a 2016 WTTW report. “No aldermen we spoke to had any clue how it worked.”

These reforms are a good step to address rampant fraud, waste and abuse within Chicago’s workers’ comp program. Transparency is important, but so is bringing workers’ comp costs in line with those in other municipalities.

Lightfoot has warned city residents to brace for further tax hikes to fix serious budget problems. But there are better ways forward in a shrinking city with the highest total debt burden among the country’s 10 largest cities, an astounding $119,000 per taxpayer, according to Truth in Accounting. Lightfoot and aldermen must back pension reform and new agreements with the city’s employee unions. Controlling costs and spending can fix Chicago. Continually raising taxes has failed in the past, so there’s nothing to prove it can fix the city’s future.