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Investigator: Workers' Comp shortchanging workers, employers?

11:52 PM, Nov 7, 2011   |    comments
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CLEVELAND -- The Ohio Bureau of Workers' Compensation routinely goes after injured workers who try to cheat  the system, but now injured workers, as well as their employers, are saying it is the state agency that is cheating them.

The agency that is responsible for providing medical and wage-replacement benefits for work-related injuries, diseases and deaths is being pursued in court by injured workers and employers.

The lawsuits are separate, but when combined, they claim the bureau has shortchanged injured workers and employers by at least $4 billion.

Workers' Compensation declined to comment on the pending litigation, but in a statement it said the bureau's "priority is on increasing quality of service. This means getting injured workers back on the job sooner... and ensuring a sound process for those who wish to settle their claim. For businesses, it means charging rates that are as low as possible."

Pietro Cristino is bringing the lawsuit on behalf of injured workers. At 72, he can barely get around his Brook Park home. After coming here from Italy as a young man, Cristino became permanently disabled after a workplace injury in the 1980s.

Like other workers who can no longer work due to an injury, Cristino was entitled to collect workers comp checks every other week -- for  rest of his life.

Then, Cristino got a call from Workers' Comp offering to give him a one-time, lump sum payment instead of getting the checks, the lawsuit says.

"They said it's easy," according to attorney Frank Gallucci, who along with attorney Craig Bashein, is representing Cristino in a lawsuit seeking class-action status.

"It's an equation. This much money is the equivalent of you getting these payments over time."

What they didn't tell Cristino, the lawyer says, is that the bureau was lowballing him.

"He lost what is probably in the neighborhood of $35,000," said Gallucci. 

Cristino's not alone. At least 20,000 permanently disabled workers in Ohio have taken similar lump-sum settlements since 1994 - and the lawsuit says they were all offered much less than they were entitled to receive.

In a videotaped deposition, a Workers' Comp official admitted the bureau routinely offered injured workers only 70 percent of what they were legally entitled to receive. In other words, the bureau took 30 percent right off the top when beginning negotiations.

"I'm saying that, for consistency, they looked at 70 percent as the starting point," said Kenneth Brown, who helps oversee the lump-sum settlements offered by the bureau to workers who are permanently disabled. "You could go up. You could go down."

A former Workers' Comp employee, however, said they were trained by the bureau never to go above 70 percent, according to a sworn affidavit obtained by Channel 3 News.

The former employee said that, in the 12 years he performed lump-sum settlements, "no one received more than 70 percent" of what they were entitled to. In fact, he noted, bureau staff was trained to "negotiate an even larger discount with the injured worker if we were able to."

"I never knew a thing about it," said Charles Dupert, who took a lump-sum payment after becoming permanently disabled in a work-injury. "It shouldn't be allowed. I mean, we got that coming to us and why should somebody else take it? They're just pulling it out of our pockets."

Meanwhile, employers, including Corky and Lenny's deli, are accusing the bureau in a class action lawsuit of cheating them out of $200 million a year.

"My premiums increased by over $65,000 to a total of $95,000 a year," said Earl Stein, co-owner of Corky and Lenny's.

The lawsuit accuses the bureau of giving discounts of up to 95 percent on workers comp insurance to businesses with good safety records, then sticking it to other employers by jacking up their rates.

Corky and Lenny's sliced its business to the bone to stay afloat, but by some estimates, the bureau's practices forced 2,500 business per year to shut down.

"Experts they hired paid millions of dollars and told them that the system wasn't working," said attorney Jim DeRoche, who represents the employers in the lawsuit. "This was a money-making operation."  


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