Brokers Reject Deal in Ohio Scandal

The Ohio state insurance fund for injured workers continued efforts to reduce soaring medical costs this week, meeting with companies the agency says must brace for lower payments for managing medical claims.

Payments to those companies jumped more than 40 percent since the arrangement began in 1998, though the state is seeing about half as many claims. The state paid about $171 million to 26 managed care companies in 2005, the bureau said.

Employers pick the companies to oversee claims filed by their injured workers.

“If we are to reach our goal of efficient and cost-effective operations, we need to assure that the services we purchase are of value,” Bill Mabe, administrator of the Ohio Bureau of Workers’ Compensation, said in a news release.

In a related development, two investment brokers accused of bribing a former state workers’ compensation official have rejected plea deals offered by federal prosecutors.

“We intend to go to trial in this matter. There will be no plea,” attorney William Beyer said Tuesday. He represents broker Daniel O’Neil.

The charges against O’Neil and broker Michael Lewis are part of a yearlong political scandal that has shaken the state’s Republican-dominated government.

O’Neil, 54, of Chesterland, and Lewis, 71, of Willoughby, have pleaded not guilty to federal charges that they bribed Terrence Gasper, the former chief financial officer of the Ohio Bureau of Workers’ Compensation.

Gasper pleaded guilty in June to federal and state charges that he accepted bribes in exchange for doling out agency business. He’s expected to testify against O’Neil and Lewis.

The two brokers managed stock investments for the $15 billion insurance fund for injured workers while working at firms that received hundreds of thousands of dollars in commissions from the agency.

Also Tuesday, the former chief investment officer at the workers’ comp bureau defended his ties to a bureau broker including shared meals described in newly released e-mails.

James McLean exchanged frequent personal e-mails with Chicago broker Robert Rogoz, even thanking him for a night out, The Columbus Dispatch reported.

McLean, fired by the bureau last year, says he did nothing wrong and says a 2000 workers’ comp bureau memo permitted such meals.

Investigators probing Ohio’s government corruption scandal have been looking at meals and gifts given to officials at the bureau and Ohio’s pension funds by vendors doing business with those agencies.

McLean said Rogoz’ help managing some of the smaller workers’ comp investment funds earned the state $70 million over time. A message was left with Rogoz seeking comment.