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Chicago Reports Improved Results on Workers’ Compensation Reform

CHICAGO, IL – Shortly after taking office, Chicago Mayor Lori Lightfoot hired an outside claims administrator to oversee a $100 million-a-year workers’ compensation program she claimed was loosely run and ripe for corruption.

On Tuesday, Chicago Chief Financial Officer Jennie Huang Bennett delivered an encouraging progress report on the work done by Gallagher Bassett, the firm hired to administer the program long run by now-indicted Alderman Edward Burke.

In her address, Bennett traced much of the savings to a “nurse triage system.” How it works is when an employee calls to make a claim, a nurse walks them through the incident to help determine whether a claim was needed. She said that this process alone produced a 30% reduction in incidents being converted to claims. In addition to this she added, “the city also increased closure of non-litigated claims by 10%, reduced days an employee was off work by nine days, reduced the overall claims litigated by 12% and reduced the average cost of medical treatment by 8%.”

They also put in place an “enterprise risk management system” to look for efficiency improvements that would mitigate some of the tens of millions of dollars that Chicago taxpayers pay each year in settlements and judgments.

“Examples of efficiencies in this area include creating a new driving training for police officers as well as changes to the policy to reduce the incidences of car crashes, which cost the city $22 million over the course of three years. The city also put in place an after-action review for litigation to conduct a root cause analysis on how to improve internal city processes to prevent future settlements and judgments,” Bennett said.

On the day she outsourced the program, Lightfoot accused Burke of allowing 1,300 “open” claims to accumulate that had already cost the city nearly $300 million. More than 600 of those open claims were at least a decade old.

“A system of this size and significance has no business being controlled by a single member of the City Council — not to mention controlled without meaningful oversight, controls or transparency,” Lightfoot said.

The program had been Burke's exclusive purview for decades. He was chair of the Finance Committee until January of 2019 when he was charged with attempted extortion and forced to relinquish the chairmanship. Former Mayor Rahm Emanuel then shifted control of workers’ compensation from the Finance Committee to the city’s Department of Finance.

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