Ohio Workers’ Comp Bureau Too Lax in Kickback Probes, Report Says

December 19, 2006

The Ohio state’s scandal-plagued fund for injured workers failed to aggressively investigate allegations of kickbacks and other schemes by managed care providers, The (Toledo) Blade reported recently.

Since 2004, the Bureau of Workers’ Compensation has led 30 investigations, the newspaper reported in the first of a three-part series examining the bureau.

Only once did the bureau substantiate an allegation and punish a managed-care organization for improper marketing. The firm was not allowed to accept new employers for three months, the newspaper reported.

Managed care firms receive millions of dollars each year to oversee the care of Ohio’s injured workers. The money comes from premiums paid by Ohio businesses, and the amount of money a firm receives is based on how many clients it oversees.

If managed care companies try to encourage referrals and swell their coffers by offering kickbacks, their state contracts can be terminated.

Bonnie Fraser’s administrative company in Avon Lake refers BWC clients to service providers. When she reported being offered a 10 percent kickback from a managed care provider, bureau investigators simply interviewed the company’s CEO before determining the claim could not be substantiated, the newspaper said. To Fraser, the inquiry wasn’t rigorous or thorough.

“Apparently, they don’t want to investigate this for some reason,” Fraser said. “They don’t want to turn over the rocks, and that is not a good thing.”

The bureau’s investigation department slogs through about 6,000 allegations a year, the unit’s assistant director Scott Fitzgerald said. Most of the claims are from workers with injuries, and it takes time to work through each case.

If agents can’t back up an allegation, “We usually don’t move forward with it,” Fitzgerald said.

In another case, the newspaper said its analysis showed investigators never followed up on a claim from a managed care company that a competing firm, Gates McDonald, was offering kickbacks to the city of Cleveland for steering business its way.

An assistant to Mayor Frank Jackson denied any such agreement, and agents never interviewed officials from Gates McDonald, The Blade said.

Bureau spokesman Nancy Smeltzer defended the agency’s work and said the organization is now more transparent than ever in its operations.

The bureau has come under fire in the past two years after allegations of corruption and wrongdoing surfaced.

Former GOP fundraiser Tom Noe was sentenced to 18 years in prison last month for embezzling millions of dollars from a $50 million rare-coin fund he managed for the bureau, and BWC chief financial officer Terrence Gasper is awaiting sentencing after he pleaded guilty earlier this year to taking bribes from brokers doing business with the agency.

Topics Workers' Compensation Ohio

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