January 24, 2008

Weitzman's Office Unearths Workers Compensation Checks Cashed by Deceased

Test of County’s files finds two deceased people never removed from records

Nassau County Comptroller Howard Weitzman revealed today that an audit by an outside vendor hired by his office to review the county’s lifetime workers compensation cases turned up two deceased claimants still receiving checks from the county. One deceased claimant’s checks totaling $5,590 had been cashed, even though he had been dead since July 2007. The other claimant was sent checks, but the checks were never cashed.

“Our report shows that 13 checks for $430 each were cashed after the claimant died on July 21, 2007,” Weitzman said.  “It is obvious that better procedures must be put into place to keep all workers compensation information current and that a complete review of the entire population of lifetime recipients has to be done.”

The County’s workers compensation program is managed by a third party administrator. The County currently pays over $9 million annually to lifetime Permanent Partial Disability recipients (PPD).

The Comptroller’s Office contracted with an outside managed care services company to conduct an audit of the PPD claimants. The company sampled 7.8 % of the County’s approximately 1,000 claimants currently receiving lifetime workers compensation benefits.

According to Comptroller Weitzman, if the error rate found in the sample were applied to the entire population of claimants, additional instances would be found of checks being fraudulently cashed even though the claimants are deceased.

“We recommend that the administration instruct its third party administrator to compare all the PPD claims with the Social Security Death Index to bring all the records up to date,” Weitzman said.

Weitzman had the audit prepared because the administration is exploring paying an outside firm to take over financial responsibility for its lifetime workers compensation payments. The administration has included savings of approximately $5 million from this initiative in its 2008 budget. Inaccurate information could affect pricing of the portfolio, so an accurate and current record of all claimants is extremely important, Weitzman added.

The audit report found that overall payments made by the third party administrator matched the workers compensation award. However, the report also indentified two instances of errors in claimants’ date of birth information, which could also affect pricing.

Comptroller Weitzman has referred the matter of the deceased claimant and the cashed checks to the Nassau County District Attorney.