Overview
The Department of Industrial Accidents (DIA) did not perform mandated annual reporting of attorney fees and insurer penalties, or quarterly reporting of case continuances, to the Workers’ Compensation Advisory Council (WCAC). During our audit period, DIA’s Case Management System (CMS) Compensation Screen Reports listed insurer penalties of $60,430 and attorney fees of $157,694,993. However, DIA only reported referral filing fees to WCAC. In addition, our analysis showed multiple case continuances that were not reported to WCAC.
As a result, the council cannot accurately monitor penalties, fees assessed against Commonwealth insurers and paid to attorneys, and case continuances. In addition, WCAC may not have an accurate record of case continuances.
Authoritative Guidance
According to Section 7F of Chapter 152 of the Massachusetts General Laws, DIA is responsible for reporting insurer penalties and attorney fees to WCAC at least annually.
According to Section 11 of Chapter 152 of the General Laws, “Any continuance shall be . . . compiled quarterly by [DIA] and shall be submitted to the advisory council.”
Reasons for Lack of Reporting
DIA management stated that they did not report insurer penalties and attorney fees to WCAC because these funds are not retained by DIA but rather are passed through the agency to attorneys and employees. They also stated that they did not have policies and procedures to establish a process for reporting this information. According to the minutes of DIA’s WCAC board meeting on April 10, 2019, DIA management stated that the CMS was not designed to track case continuances.
Recommendations
- DIA should report attorney fees, insurer penalties, and case continuances to WCAC.
- DIA should develop policies and procedures to establish a process for reporting attorney fees, insurer penalties, and case continuances to ensure that this information is reported to WCAC.
Auditee’s Response
The Department of Industrial Accidents (DIA) reports data in a monthly report card to the Worker’s Compensation Advisory Council, and includes data specifically requested by the Council. The standard report includes: Conference and Hearing queue updates, Impartial Exam fees, waivers, and scheduled exams, Reviewing Board inventory, Stop Work Orders issued, fines collected, compliance checks, First Reports of Injury and cases filed with the DIA, COVID-19 statistics, WC Trust Fund cases and payments made, civil recovery efforts, Second Injury Fund payments and [cost of living adjustment] reimbursements, personnel update, referral fees collected and assessment collections.
The standard WCAC monthly report card does not include attorney fees, insurer penalties and case continuances as this has not been an area of focus for the council. The DIA will update its practices to ensure that all fees, penalties, and case continuances are included in the data presented to the Advisory Council during the regularly scheduled meetings.
The DIA will begin including the attorney fees, insurer penalties and case continuances at the next Council meeting.
| Date published: | March 23, 2021 |
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