Costs go up, though claim numbers fall

Several companies that manage claims have donated to politicians.
COLUMBUS (AP) -- Payments from Ohio's investment fund for injured workers to companies that manage cases have jumped more than 40 percent since the arrangement began, though the state is seeing about half as many claims, records show.
The Bureau of Workers' Compensation, funded by fees charged to employers, paid about $1.4 billion from 1998 through the fiscal year that ended last summer to the companies, called managed care organizations.
William Mabe, who took over as bureau administrator last fall, has called a meeting next week with some of the largest managed care organizations. The meeting is aimed at cutting those costs, a message Mabe said the companies likely won't want to hear.
"The question I will put to them is that claims are down and costs are up substantially, and we have to take a hard look at that," he said Thursday. "Is the reimbursement connected to the amount of work you are doing? At first blush, it doesn't appear so."
Misleading assessment
Executives at some of the companies said comparing management fees to caseloads is misleading because the bureau keeps unreliable data and has changed its definition of a claim. Other supporters of privatized management of bureau work said it has saved tax dollars because it helps get workers back on the job faster, meaning the state spends less on benefits.
Early medical intervention by managed care organizations cut payouts for lost-time claims by 20 percent from 1997 through June 2005, said John Brinkman, a spokesman for CareWorks, the largest recipient of the bureau's case management fees.
In that time, the bureau has paid $368 million to CareWorks, which is based in the Columbus suburb of Dublin and whose founder, president and chief executive, William Pfeiffer, was an interim bureau administrator and a top aide to former Ohio House Speaker Vern Riffe.
Several of the private companies that have been paid millions by the bureau to handle claims of injured workers have also put money into campaigns of Ohio's politicians.
Campaign funds
Executives and associates from 26 of these companies have contributed about $610,000 to statewide candidates and officeholders.
Gov. Bob Taft has received $127,000. CareWorks officials have donated about $208,000 into various campaigns.
Cleveland-based 1-888-OhioComp and its parent company have contributed more than $218,000 to state candidates and have received about $29 million from the bureau.
Sen. Marc Dann, a Democrat running for attorney general and a critic of the bureau, accepted $60,000 in contributions from the family that runs 1-888-OhioComp. He said he now plans to return the money.
On Friday, Dann called on his Republican opponent in the attorney general's race, state Auditor Betty Montgomery, to audit the bureau's medical finances and the managed care companies.
However, the auditor has no power by law to do so, Montgomery campaign spokeswoman Jen Detwiler said. Montgomery cannot audit the bureau unless there is evidence of a fiscal emergency and she has no authority to audit private companies, Detwiler said.
The bureau, which has a $14 billion portfolio, is still being overhauled after a scandal over a $300 million loss in a high-risk investment fund and an ill-fated $50 million investment in rare coins. The major GOP fundraiser who managed the coin investment, Tom Noe, is set for trial next month on charges of taking at least $1 million from it.

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