Purpose

The objective of our examination was to determine whether payment requests (payments) to claimants and medical providers from the Workers’ Compensation Board’s (Board) sole custody funds during the period January 1, 2013 through December 31, 2013 were appropriate and complied with the New York State Workers’ Compensation Law and New York State’s mandated fee schedules.

Background

The Board administered four sole custody funds in 2013 – the Uninsured Employers Fund, the Special Fund for Disability Benefits, the Second Injury Fund and the Fund for Reopened Cases. The Board processes all payments from the Uninsured Employers Fund and the Special Fund for Disability Benefits. Payments from the Second Injury Fund are processed by the Special Funds Conservation Committee (SFCC), a private concern established under the Law. Payments from the Fund for Reopened Cases are processed by both the Board (compensation payments) and SFCC (medical payments). All payments, whether processed by the Board or SFCC, are entered in the Board’s automated payment system, where they are subject to various edit and validation checks, approved by the Board for payment, and submitted to our Office for approval.

Key Findings

Our examination identified and disallowed 279 incorrect payments totaling over $1.6 million that were approved by the Board and submitted to our Office for final approval even though they: (i) were not properly supported, (ii) were not in compliance with mandated fee schedules, (iii) contained computation errors, (iv) were previously approved and paid, and/or (v) contained miscellaneous errors.

Key Recommendations

• Reinforce the importance of accurately processing payments to Board and SFCC staff. If necessary, provide training to staff to ensure payments comply with the Law and mandated fee schedules.
• Consider performing a risk assessment to determine if payments processed by SFCC should be reviewed by Board staff to ensure they comply with the Law and mandated fee schedules.