LTC 119-2015 Workers' Compensation Audit #14/15-036 g___A MIAMI BEACH 2015 MAR 23
OFFICE OF THE CITY MANAGER
NO. LTC# 119-2015 LETTER TO COMMISSION
TO: Mayor Philip Levine and Members of he City Co fl ission
FROM: Jimmy L. Morales, City Manager
DATE: March 23, 2015
SUBJECT: Workers' Compensation Audit#14/1510 36
This Letter to Commission is to summarize and transmit the final audit findings
from representatives of the Florida Department of Financial Services, Bureau of
Monitoring and Audit, regarding the City of Miami Beach's Workers
Compensation Program Administration.
The Division of Workers' Compensation audits the benefit disbursement and
claims handling practices of all self-insured employers in the State of Florida.
Claims are audited to determine compliance with statutory and rule'requirements
regulated by the Division. The process looks for patterns or practices of
unreasonable delay in claims handling, timeliness and accuracy of payments,
Y 9
and any other issues as identified by the Division.
The City uses a third party administrator ("TPA") to handle all workers'
compensation benefits, Johns Eastern Company (until 1/31/2015). A new TPA,
CorVel, began handling the City's workers' compensation claims effective
February 1, 2015. The audit was conducted at Johns Eastern's office in
Sarasota, Florida the week of January 12 — 15, 2015. The team examined 103
files with accident dates ranging from June 28, 1990 through August 6, 2014.
Below is a summary of the audit findings by category:
I. Claims Handling Practice Reviewed
Claims Handling Practice #in Performance
Reviewed #Due Violation Achieved %
Prompt Payments of 878 8 99.08%
Indemnity
Informational Brochure 95 0 100%
Employee Notification 95 0 100%
Filing: First Reports of Injury 66 0 100%
or Illness
Filing: Notices of Action or 196 6 96.93%
Change
Letter to Commission
Workers' Compensation Audit#14/15-036
Page 2
Claims Handling Practice #Due #in Performance
Reviewed Violation Achieved %
Filing: Notices of Denial or 22 0 100%
Rescinded Denial
Filing: Claim Cost Reports 154 0 100%
II. Claims Handling Practice Reviewed
Claims Handling Practice #Files #in Performance
Reviewed Reviewed Violation Achieved %
Accuracy of Indemnity 74 10 86.49%
Calculation
III. Electronic Data Accuracy Practice Reviewed
Electronic Data Accuracy #Reviewed #in Performance
Practice Reviewed in MDS Violation Achieved %
Medical Data—Accuracy of 158 1 99.36%
Received Dates
Medical Data—Accuracy of 158 0 1000/0
Paid Dates
Medical Data— Bills Not
Reported 158 2 98.75%
IV. Electronic Data Accuracy Practice Reviewed
Electronic Data Accuracy #in Performance
Practice Reviewed #Due Violation Achieved %
First Report of Injury or
Illness Data—Accuracy of 66 0 100%
Dates of Accident
First Report of Injury or
Illness Data—Accuracy of 65 0 100%
Date Reported to Employer
First Report of Injury or
Illness Data—Accuracy of 66 0 1000/0
Date Reported to Claim
Administrator
First Report of Injury or
Illness Data—Accuracy of 36 0 100%
Date Disability Began
First Report of Injury or
Illness Data—Accuracy of 8th
35 0 100%
Carrier Knowledge of the 8
Day of Disability
First Report of Injury or
Illness Data—Accuracy of 11 0 100%
Initial Date of Payment
First Report of Injury or
Illness Data—Accuracy of 34 0 100%
Salary End Date
First Report of Injury or 66 0 100%
Illness Data—Accuracy of
Letter to Commission
Workers' Compensation Audit#14/15-036
Page 3
Electronic Data Accuracy #Due # in Performance
Practice Reviewed Violation Achieved %
Salary in Lieu of
Compensation
First Report of Injury or
Illness Data—Accuracy of 66 0 100%
Initial Disability Type
As stated in the March 20, 2015, letter from Tanner Holloman, Director, Florida
Department of Financial Services, Division of Workers' Compensation, the City
met audit performance standards and deficiencies found did not require an
assessment of penalties.
Audit findings were shared with the new TPA, CorVel, with the expectation that
on the next State audit the City will have even better results.
Please let me know if you have any questions or need any additional information.
Attachment
c: Kathie G. Brooks, Assistant City Manager
Sylvia Crespo-Tabak, Human Resources Director
Sonia Bridges, Risk Manager
Attachments
JLM/KGB/SC-T
w h
CHIEF FINANCIAL OFFICER
JEFF ATWATER
STATE OF FLORIDA
March 20, 2015
Ms. Sylvia Crespo-Tabak, Human Resources Director
City of Miami Beach
•
1700 Convention Center Drive
Human Resources Department
Miami Beach, FL 33139 •
RE: Workers' Compensation Audit ##14/15-036
City of Miami Beach(#9614)
Dear Ms. Crespo-Tabak:
The Division would like to commend City of Miami Beach, for their performance on the audit
recently conducted by the Bureau of Monitoring and Audit. City of Miami Beach•met the
Division's audit performance standards and received no penalties as a result of this audit.
We also wish to take this opportunity to thank you for your cooperation during the audit and to
reaffirm the importance of audits to actively ensure the self-execution of the workers'
compensation system. On behalf of the entire Division, congratulations and keep up the good .
work!
Sincerely,
Tanner Holloman
Director
TH/bjw
cc: Ms. Sonia Bridges, Risk Manager
City of Miami Beach
Mr. Greg Burden, Quality Assurance Manager
Ms. Beverly Adkins, Executive Vice President
Ms. Alice Banes, Director of TPA Operations
Johns Eastern.Company
•
FLORIDA DEPARTMENT OF FINANCIAL SERVICES
Tanner Holloman • Director
Division of Workers'Compensation
200 East Gaines Street•Tallahassee,Florida 32399-4220•Tel.850-413-1600•Fax 850-413-1973
Email•Tanner.Holloman @MyFloridaCFO.com
AFFIRMATIVE ACTION • EQUAL OPPORTUNITY EMPLOYER.
,rte'^
CHIEF FINANCIAL OFFICER
JEFF ATWATER
STATE OF FLORIDA
March 20, 2015
Ms. Sylvia Crespo-Tabak, Human Resources Director
City of Miami Beach
1700 Convention Center Drive
Human Resources Department
Miami. Beach, FL 33139
RE: Workers' Compensation Audit#14/15-036
City of Miami Beach(#9614)
Dear Ms. Crespo-Tabak:
The Division would like to thank Mr. Greg Burden for his response to the preliminary report. The enclosed final
report reflects the findings of the audit performed by representatives of the Bureau of Monitoring and Audit
during the week of January 12, 2015, through January 15, 2015. The deficiencies found within this audit do not
require an assessment of penalties.
Should you have any questions concerning the findings outlined in this report,please contact Ms. Barbara Willis
by phone or email:
(850)413-1794
Barhara.VV'illis;u,mylloridaC ().cum
Res ectfully yours,
f)f).(A
Pamela Macon, Bureau Chief
Bureau of Monitoring&Audit
PM/bjw
Enclosure
cc: Ms. Sonia Bridges,Risk Manager
City of Miami.Beach
Mr. Greg Burden,Quality Assurance Manager
Ms. Beverly Adkins, Executive Vice President
Ms. Alice Banes, Director of TPA Operations
Johns Eastern Company
FLORIDA DEPARTMENT OF FINANCIAL SERVICES
Division of Workers'Compensation•Bureau of Monitoring&Audit
200 E.Gaines St.•Tallahassee,FL 32399-4224•Tel.850-413-1608•Fax 850-414-2244
Affirmative Action•Equal Opportunity Employer
NOTICE OF RIGHTS
You have a right to administrative review of this action by the Department under sections
120.569 and 120.57, Florida Statutes.
To obtain review, you must file a written petition requesting review. If you dispute a
material fact contained in this action, you are entitled to a hearing under Sections 120.569 and
120.57(1), Florida Statutes, at which you may be represented by counsel, present evidence and
argument on the issue(s), examine witnesses, submit a proposed recommended order, and file
exceptions to the recommended order of the Administrative Law Judge. If you do not dispute a
material fact contained in this action, you are entitled to a hearing under section 120.57(2),
Florida Statutes, at which you may be represented by counsel, present documentary evidence,
and present a written statement in opposition to this action.
A petition for a hearing under sections 120.569 and 120.57, Florida Statutes, must
conform to Rule 28-106.2015, Florida Administrative Code. The petition shall contain a) the
name, address, and telephone number, and facsimile number(if any)of the petitioner; b)the
name, address, and telephone number, and facsimile number of the attorney or qualified
representative of the petitioner(if any) upon whom service of pleadings and other papers shall be
made; c) a statement requesting an administrative hearing identifying those material facts that are
in dispute. If there are none, the petition must so indicate; d) a statement of when the petitioner
received notice of the agency action; and e) a statement including the file number to the agency
action.
You must file the petition for hearing so that it is received by the Department within
twenty-one(21) days of your receipt of this agency action. The petition must be filed with Julie
Jones, the DFS Agency Clerk, Department of Financial Services, 612 Larson Building, 200 East
Gaines Street, Tallahassee, Florida 32399-0390. FAILURE TO FILE A PETITION WITHIN
THE TWENTY-ONE (21) DAYS CONSTITUTES A WAIVER OF YOUR RIGHT TO
ADMINISTRATIVE REVIEW OF THE AGENCY ACTION.
Mediation under section 120.573, Florida Statutes,is not available.
1°car ilceounting l',e(ini■:
5432.1
e FINAL AUDIT REPORT -. ; - .
-
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CITY OF MIAMI BEAC�-I,. .
Miami Beach, FL .
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Audit Period: November er 1, 20
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DEPARTMENT OF FINANCIAL SERVICES .
DIVISION OF WORKERS' COMPENSATION .
:.AUDIT NUMBER:--":.14/15-036:._- - -
•
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AUDIT DATES: January 12, 2015, through•January 15, 2015 •
. . .
AUDITORS: Sharna Amos, Suzette`Buchaan, Holly Drake,
- Christophe Johnson and La.wanna Morrow
-
1
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TABLE OF CONTENTS
I. INTRODUCTION 1
IL BENEFIT DISBURSEMENT PRACTICES 2
A. Prompt Payments of Indemnity 2
B. Accuracy of Indemnity Calculation 2
XII. ELECTRONIC DATA ACCURACY PRACTICES 4
A. Medical Data Review 4
B. First Reports of Injury or Illness Data Review 5
IV. CASE MANAGEMENT TECHNIQUES 6
A. Claimant Contact 6
1, Informational Brochure 6
2. Employee Notification Letter 6
B. Claim Forms/EDI Findings 6
1, First Reports of Injury or Illness 6
2. Notices of Action or Change 7
3. Notices of Denial or Rescinded Denial 7
4. Claim Cost Reports 8
V. SUMMARY 9
•
VI. CONCLUSIONS 11
I. INTRODUCTION
The Division of Workers' Compensation, pursuant to Section 440.525, F.S., audits the benefit
disbursement and claims handling practices of all insurance carriers and self-insured employers providing
workers' compensation coverage in the state of Florida. The audit process may address patterns or
practices of unreasonable delay in claims handling, timeliness and accuracy of payments, and any other
in key performance
ifi by the Division, These audits are either based on an analysis of certa y p
issues identified y y
indicators or are performed at the discretion of the Division.
Prior to the audit, City of Miami Beach was asked to submit, to the Division, a list of all claim files with
claims activity within the designated examination period. The following files were requested for the
audit:
• 98 claim files for review of accuracy and timeliness of indemnity payments, mandatory claim
forms/Electronic Data Interchange filing and the mailing of the "Important Workers'
Compensation Information for Florida's Workers"Brochure and Employee Notification Letter
• 29 claim files for validation of the medical data reported to the Division and the mailing of the
"Important Workers' Compensation Information for Florida's Workers" Brochure and Employee
Notification Letter
• 22 claim files for review of accuracy and timeliness of denied cases in filing the Notices of
Denial or Rescinded Denial and First Reports of Injury or Illness, and the mailing of the
"Important Workers' Compensation Information for Florida's Workers" Brochure and Employee
Notification Letter
• 8 Permanent Total Disability claim files for review of accuracy and timeliness of both Permanent
Total Disability and Permanent Total Supplemental benefits and mandatory claim
forms/Electronic Data Interchange filing
Representatives of the Division of Workers' Compensation conducted the audit of City of Miami Beach
(#9614) at the office of their third party administrator, Johns Eastern Company(#6043), during the week
of January 12, 2015, through January 15, 2015. The audit was conducted in their office in Sarasota, FL.
The audit team examined a total of 103 claim files with accident dates ranging from June 28, 1990,
through August 6, 2014. These claims were audited to determine compliance with statutory and rule
requirements regulated by the Division.
1
II. BENEFIT DISBURSEMENT PRACTICES
A. Prompt Payments of Indemnity
Authority: Section 440.20(8)(b), F.S.; and Rule 69L..24.006,F.A.C.
Findings: Total Indemnity Payments Due:. 878
Total Late: 8
Minimum Standard: 95%
Performance Achieved: 99.08%
A review of claim files identified 878 indemnity payments that should have been paid to
injured workers. 8 of these payments were paid late.
A.breakdown of the 8 late payments is-as follows:
• 4 were paid dne day late
• 2 were due to late initial payments
• • 1 was due to an adjuster error
• I was due to a late payment of Impairment Income Benefits
The required minimum performance standard of 95% for prompt payments of
indemnity was achieved.
B. Accuracy of Indemnity Calculation.
Authority: Sections 440.525, F.S.; 440.20, FS.
Findings: Total Claim Files Reviewed for Indemnity Payments: 74
Total Claim Files with Overpayments: 2
Total Claim Files with Underpayments: 8
• Total Claim.Files with Overpayments/Underpayments: 1,0
•
Incorrect payment calculations were found on 10 of the 74 claim files reviewed for indemnity
payments. A breakdown of the 74 claim files identified 2 with an overpayment and.8 with an
underpayment.
A description of the 2 claim files with an overpayment is as follows:
• 2 were due to incorrect calculations of Permanent Total/Permanent Total
Supplemental benefits .
The total amount of benefits overpaid on these 2 claim files totaled$4=207.94. . .
•
•
2.
A breakdown of the 8 claim files with an underpayment is as follows:
• 6 were due to penalties and interest owed but not paid
• 2 were due to incorrect calculations of Permanent Total/Permanent Total
Supplemental benefits
The amount of benefits underpaid on these 8 claim files totaled $503.51, and the amount of
penalties and interest was $291.91. The total amount of benefits, along with penalties and interest,
paid to injured workers as a result of the audit is$795.42.
3
III. ELECTRONIC DATA ACCURACY PRACTICES
The statutory changes implemented by the Florida Legislature in 2003 clearly emphasized the importance
of a viable and efficient workers' compensation system. In order for these legislative changes to be
effective, it is essential that insurers and self-insurers report data to the Division accurately and timely.
Additionally, the Division will continue to conduct on-site examinations of insurers and self-insurers to
determine the quality of the data being submitted.
All system stakeholders, including the Division, are obligated to take measures to ensure all data is
reported accurately. A failure on the part of an insurer, self-insurer, or claims-handling entity to provide
accurate data impairs the Division's ability to monitor carrier performance and lessens the quality of data
gathered on an aggregate basis. Reliable data provides system stakeholders with essential information to
conduct research and better manage the self-execution of the workers' compensation system.
A. Medical Data_Review Medical Data System(MDS)
Authority: Section 440.525, F.S.
Findings: Total Files Reviewed: 29
Total Number of Bills Reviewed: 160
Total Number of Bills Reviewed in KIDS: 158
Number of Correct Received Dates: 157
Percentage of Correct Received Dates: 99.36%
Number of Correct Paid Dates: 158
Percentage of Correct Paid Dates: 100%
Number of Bills Not Reported: 2
Percentage of Reporting Bills: 98.75%
To determine the accuracy of the medical data submitted to the Division, the audit team
performed a review of the medical data submitted from July 15,2014,through December 9, 2014.
A description of the 1 bill with an incorrect Received Date is as follows:
• 1 bill was due to a data processing error
The Division's monitoring and/or examination process identified no medical bill data
elements that required the assessment of a penalty for inaccurate reporting.
4
B. First Reports of Injury or Illness Data Review—Electronic Data Interchange(EDI)
Authority: Section 440.525, F.S.
Findings: Total Forms Reviewed: 66
Number of Correct Dates of Accident: 66 of 66
Percentage of Correct Dates of Accident: 100%
Number of Correct Dates Reported to the Employer: 65 of 65
Percentage of Correct Dates Reported to the Employer: 100%
Number of Correct Dates Reported to Claim Administrator: 66 of 66
Percentage of Correct Dates Reported to Claim Administrator: 100%
Number of Correct Dates Disability Began: 36 of 36
Percentage of Correct Dates Disability Began: 100%
Number of Correct Carrier Knowledge of the 8fh Day of Disability: 35 of 35
Percentage of Correct Carrier Knowledge of the 8`h Day of Disability: 100%
Number of Correct Initial Dates of Payment: 11 of 11
Percentage of Correct Initial Dates of Payment: 100%
Number of Correct Salary End Dates: 34 of 34
Percentage of Correct Salary End Dates: 100%
Number of Correct Salary In Lieu of Compensation: 66 of 66
Percentage of Correct Salary In Lieu of Compensation: 100%
Number of Correct Initial Disability Types: 66 of 66
Percentage of Correct Initial Disability Types: 100%
To determine the accuracy of the First Report of Injury or Illness data submitted to the Division,
the audit team performed a review of First Report of Injury or Illness data submitted from
December 4, 2009,through August 6,2014,by City of Miami Beach.
The Division's monitoring and/or examination process identified no EDI data elements that
required the assessment of a penalty for inaccurate reporting.
5
IV. ELECTRONIC DATA ACCURACY PRACTICES
A. Claimant Contact
1. Informational Brochure
Authority: Section 440.185(4), F.S.,and Rule 69L-3.0035, F.A.C.
Findings: Total Informational Brochures Due: 95
Total Not Mailed: 0
Total Mailed Late: 0
Total Brochures in Non-compliance: 0
Notice Compliance Percentage: 100%
A review of claim files identified 95 DFS-F2-DWC-60 "Important Workers' Compensation
Information for Florida's Workers" or DFS-F2-DWC-61 "lnformacion Importante De Seguro
De Indemnizacion Por Accidentes De Trabajo Para Los Trabajadores De La Florida"
brochures that should have been mailed; all of these Informational Brochures were mailed
timely.
2. Employee Notification Letter
Authority: Section 440.185(11),F.S.
Findings: Total Employee Notification Letters Due: 95
Total Not Mailed: 0
Total Mailed Late: 0
Total Letters in Non-compliance: 0
Notice Compliance Percentage: 100%
A review of claim files identified 95 Employee Notification Letters that should have been
mailed; all of these Employee Notification Letters were mailed timely.
The required minimum performance standard for Informational. Brochures and
Employee Notification Letters was achieved.
B. Claim Forms/EDI Findings
1. First Reports of Injury or Illness
Authority: Section 440.185(2),F.S.,and Rules 69L-3.0045 and 69L-56.301, F.A.C.
Findings: Total Reports Due: 66
Total Not Filed: 0
Total Filed Late: 0
Total First Reports of Injury or Illness in Non-compliance: 0
A review of claim files identified 66 First Reports of Injury or Illness that should have been
filed with the Division; all of these Reports were filed timely.
6
2. Notices of Action or Change
Authority: Section 440.20, F.S., and Rules 69L-3.0091, 69L-56.304,69L-56.3045, F.A.C.
Findings: Total Notices Due: 196
Total Not Filed: 3
Total Filed Late: 3
Total Notices in Non-compliance: 6
Notice Compliance Percentage: 96.93%
A review of claim tiles identified 196 Notices of Action or Change that should have been filed
with the Division; 3 of these Notices were not filed and 3 were filed late.
A description of the 3 Notices of Action or Change that were not filed is as follows:
• 3 were due to report return to work information
A breakdown of the 3 Notices of Action or Change that were filed late is as follows:
• 2 were due to report maximum medical improvement information
• l was due to report the reinstatement of benefits
The required minimum performance standard for Notices of Action or Change was
achieved.
3. Notices of Denial or Rescinded Denial
Authority: Sections 440.185; 440.20,F.S. and Rules 69L-3.012; 69L-56.3012,F.A.G.
Findings: Total Notices Due: 22
Total Not Filed: 0
Total Filed Late: 0
Total Notices in Non-compliance: 0
Notice Compliance Percentage: 100%
A review of claim files identified 22 Notices of Denial or Rescinded Denial that should have
been filed with the Division; all of these Notices were filed timely.
The required minimum performance standard for Notices of Denial or Rescinded Denial
was achieved.
7
4. Claim Cost Reports
•
Authority: Sections 440.185; 440.20, F.S. and Rules 69L-3.016; 69L-56.3013, F.A.C.
Findings: Total Reports Due: 154
Total Not Filed: 0
Total Filed Late: 0
Total Reports in Non-compliance: 0
Report Compliance Percentage: 100%
A review of claim files identified 154 Claim Cost Reports that should have been filed with the
Division; all of these reports were filed timely.
The required minimum performance standard for Claim Cost Reports was achieved.
8
V. SUMMARY
Claims Handling Practice Reviewed #Due #In
Violation
Prompt Payments of Indemnity 878 8
informational Brochure 95 0
Employee Notification Letter 95 0
Filing: First Reports of Injury or Illness 66 0
Filing: Notices of Action or Change 196 6
Filing: Notices of Denial or Rescinded Denial. 22 0
Filing: Claim Cost Reports 154 0
#Files #In
Claims Handling Practice Reviewed Reviewed Violation
Accuracy of Indemnity Calculation 74 10
Electronic Data Accuracy Practice Reviewed Reviewed #In
In MDS Violation
Medical Data-Accuracy of Received Dates 158 1
Medical Data- Accuracy of Paid Dates 158 0
9
Electronic Data Accuracy Practice Reviewed #Due #In
Violation
First Reports of Injury or Illness Data—Accuracy of"Dates of Accident" 66 0
First Reports of Injury or Illness Data—Accuracy of"Date Reported to Employer" 65 0
First Reports of Injury or Illness Data—Accuracy of"Date Reported to Claim Administrator" 66 0
First Reports of Injury or Illness Data—Accuracy of"Date Disability Began" 36 0
First Reports of Injury or Illness Data—Accuracy of"Carrier Knowledge of the 8th Day of 35 0
Disability"'
First Reports of injury or Illness Data—Accuracy of"Initial Date of Payment" 11 0
First Reports of Injury or Illness Data—Accuracy of"Salary End Date" 34 0
First Reports of Injury or Illness Data—Accuracy of"Salary In Lieu of Compensation" 66 0
First Reports of Injury or illness Data—Accuracy of"Initial Disability Type" 66 0
10
VI. CONCLUSIONS
The deficiencies found within this audit do not require an assessment of penalties.
Loss data reported to the Division through various Division forms is an integral part of a self-executing
Workers' Compensation System. Insurers that do not comply with reporting requirements will be
penalized for each failure to timely report such information. Claims managers should closely monitor
existing programs, including the submission of medical bill data, to ensure compliance.
11