Getting Control of Municipal Workers’ Compensation Costs

| | Utilization Review

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Police officers and firefighters work physically dangerous and psychologically stressful jobs. It should come as no surprise, then, that police officers and firefighters are filing for workers’ compensation in record numbers.

The Los Angeles Times reports that between 2012 and 2015, 66% of firefighters and 60% of Los Angeles police officers filed workers’ compensation claims. Similarly, officials from Waukegan, IL, say the city is facing a workers’ comp “epidemic.” Between 2013 and 2014, the city’s workers’ compensation expenditures exceeded the city’s workers compensation budget by roughly $1 million.

Los Angeles and Waukegan are just two of many municipalities facing workers’ compensation troubles. As more public employees file workers’ compensation claims, government budgets suffer, as do the taxpayers who ultimately pay for these claims.

It’s impossible to identify one primary cause for the escalation of workers’ compensation payments, but experts from a number of cities struggling with this issue suggest two key factors:

  1. Public Departments Focus too Little on Preventing Injuries

    According to the Los Angeles Times, most firefighters and police officers filing for workers’ compensation in L.A. are not filing for injuries sustained at specific times in the line of duty. Instead, they are filing for injuries caused by “cumulative trauma.” These sorts of injuries, like back problems and carpal tunnel syndrome, occur after years of everyday wear and tear rather than from a specific incident.

    Public official Lowell Goodman told the Times that even though police and fire departments do well when it comes to preventing “injuries in the line of fire,” the departments need to “focus on smaller, common, and preventable injuries that, added together, cost the city millions of dollars.”

  2. PTSD is on the Rise

    Many police officers are filing workers’ compensation claims for psychological stress. Often, this stress is related to post-traumatic stress disorder (PTSD). PTSD is not new in police forces, but it has gone underdiagnosed for many years. It may seem like more police officers are experiencing PTSD than ever before, but in reality the only thing that has changed is the ability of officers and psychological professionals to diagnose it.

Fixing the Problem Requires Preventive Action, Support and Financial Accountability

Given the reasons behind the skyrocketing rates of workers’ compensation claims, fixing the problem requires three strategies:

  1. More Preventive Actions

    While many police and fire departments educate employees about how to avoid injury during active duty, they do not necessarily educate employees on how to avoid the cumulative trauma that arises from more routine activities. More education focusing on cumulative trauma could help lower workers’ compensation costs.

    Departments can also implement health and wellness programs that help prevent on-the-job injuries. Studies have shown that a healthier lifestyle leads to increased job performance, reduced absenteeism and fewer claims.

    Physical fitness is another preventive action. Unlike many other departments in the state, the Los Angeles Police Department does not have fitness standards beyond the academy. A lack of oversight over their officers’ physical well-being may be one reason cumulative trauma injuries made up over 20% of all claims from 2010-2013.

    In a survey of law enforcement agencies around North America, 81% of the respondents said they had a voluntary physical fitness program and only 59% of those offered incentives to employees participating in the program.

  2. Support for Officers Suffering PTSD

    Police officers suffering from PTSD can reduce their psychological stress if they have easy access to support programs, psychological professionals, and educational resources. Many police departments are taking steps to implement such support for officers with PTSD. These efforts may reduce the toll the condition takes on individuals and reduce workers’ compensation claims.

  3. Financially Accountability for Departments

    In Los Angeles, police and fire departments do not pay the medical bills associated with workers’ compensation claims. These bills are paid from a separate city fund. An audit of the LAPD found that of the 90 sampled claims, 32 were preventable. The total cost of those 32 claims was $284,350. Auditors suggested changing the arrangement so that police and fire departments paid work comp bills out of their own budgets. Making the departments financially accountable would incentivize them to control workers’ compensation costs.

    Another strategy might be to change the way benefits are paid. In the 1930s, California legislators granted 100 percent pay for injured police and fire personnel. The thinking was that they didn’t want a police officer or firefighter to fear that chasing a criminal or running into a burning building could result in a cut in pay.

    Many city officials have stated that 100 percent pay program would invite abuse, especially since injury pay is exempt from taxes. It would pay more to be “injured” than to work, creating a financial incentive to file claims for relatively minor ailments and to stay off work as long as possible. Also, fewer personnel can mean departments pay more overtime to working employees. In 2014, L.A. fire departments paid $19 million in overtime to cover shifts left by firefighters out with injuries.

As long as workers’ compensation claims and costs continue to increase at current rates, taxpayers and public infrastructure will suffer. To ensure that municipalities remain solvent, public officials and department leaders must take aggressive steps to lower the number of workers’ compensation claims among public employees.