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Workers' comp audit finds $3 million wrongly held up
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An audit of Minnesota's workers' compensation system has found that insurers are mishandling a growing number of claims, including by paying injured workers less than they deserve.
The report from the legislative auditor released Wednesday said those mistakes are resulting in about $3 million a year in underpaid benefits, and there's other evidence that insurers are trying to avoid legitimate payouts.
The $3 million in underpaid claims represents less than 1 percent of overall benefits paid, but auditors recommended improved Department of Labor and Industry oversight to catch more errors.
They also recommended that department officials keep a close watch on cases where a claim was initially denied but was eventually paid to target any insurer that might improperly deny a claim.
The audit also faults the state labor department for shortcomings in the enforcement of laws mandating that employers provide workers' compensation coverage.
Minnesota law says the department must seek reimbursement plus a penalty from an uninsured employer when an injured worker's benefits are paid out of a special state fund. But auditors found that for the period from 1998 to 2007, billing records exist for fewer than half of the cases where the state paid for benefits.
In response to the audit, Commissioner Steve Sviggum said his department is working on reforms to the system through an advisory council.
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