The District is wasting upward of $4.4 million a year on disability compensation because both the government agency and outside contractor charged with managing the program are failing to monitor claims, according to a new audit.
The city’s disability comp program “continues to be at risk for significant fraud, waste and abuse,” according to the report from the Office of the Inspector General. The third-party administrator, Sedgwick Co.’s CMI Octagon, has failedto review and monitor claims for continued eligibility, and the District’s Office of Risk Management has not exercised sufficient oversight, the audit concludes.
“There’s not enough accountability and we will drive that home,” Mayor Adrian Fenty said Friday.
All told, the report estimates the District wastes between $2.7 million and $3.3 million annually through “case management deficiencies” and missed opportunities to return claimants to the work force, and another $1.1 million a year through inappropriate payments.
The District is in the second year of a three-year, $9.4 million contract with CMI Octagon, which conducts the day-to-day operations of the program. The inspector general audited a sample of 92 claims, and found problems with 64.
For example:
» An employee with the Department of Youth Rehabilitation Services came back to work May 11, 2005 after hurting his hand on the job months earlier. But neither the employee nor the department notified disability compensation of his return. He received $306,000 over a 15-month period after returning to work.
» A D.C. public schools employee developed pain in her back and neck while moving classroom furniture on March 1, 2002 and resigned soon afterward. A February 2005 medical appointment confirmed the woman could return to work, but as of March 27, 2006, she had received $59,467 through the disability program.
In her official response to the audit, ORM Interim Director Kelly Valentine disagreed with the inspector general’s call for a one-time review of all open cases, arguing her department and CMI Octagon have successfully turned around claims management. Between September 2005 and February 2007, Valentine wrote, open medical claims were reduced by 85 percent and the number of cases in which an employee received benefits was cut by 35 percent.
Valentine did, however, agree to perform quarterly checks of all disability comp recipients.
