Purpose

The objective of our examination was to determine whether payments to claimants and medical providers (claims) by the Workers’ Compensation Board’s (Board) sole custody funds during the period January 1, 2014 through December 31, 2014 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 2014 – the Uninsured Employers Fund, the Special Fund for Disability Benefits, the Second Injury Fund, and the Fund for Reopened Cases.The Board processed and approved some claims from the Uninsured Employers Fund and the Special Fund for Disability Benefits. However, the majority of these claims are processed by a third-party administrator, Triad Group, LLC (Triad) under contract C-140311. Claims from the Second Injury Fund are processed by the Special Funds Conservation Committee (SFCC), a private concern established under the Law. Both the Board and SFCC process claims from the Fund for Reopened Cases.

Payment data is entered into the Board’s automated payment system, where the claims are subjected to various system edits and validation checks, approved, and submitted to our Office for approval prior to payment by the Board.Triad makes payments directly to the claimants then submits the paid claims to the Board for reimbursement. These claims are subjected to the same system edits and validation checks as the claims processed by the Board and SFCC and submitted to our Office for approval. If either the Board or our Office rejects a Triad claim, the reimbursement is denied. Triad is then responsible for recouping the money from the claimants.

Key Findings

Our examination disallowed 199 erroneous claims totaling over $1.3 million that were approved by the Board and submitted to our Office for final approval even though the claims: (i) were not properly supported, (ii) were not in compliance with mandated fee schedules, (iii) contained accounting or computation errors, (iv) were previously approved and paid, and/or (v) contained miscellaneous errors.

Key Recommendations

• Continue to evaluate opportunities to reduce errors.