North Carolina Governor Criticized for Workers’ Comp Fraud Statement

By MICHAEL BIESECKER | February 9, 2015

Gov. Pat McCrory is taking heat after saying in his annual State of the State address earlier this week that nearly half of workers’ compensation claims paid to state employees are the result of abuse or fraud.

“We all want to pay legitimate claims and give injured employees the best medical care we can,” McCrory said Wednesday as he announced an executive order shifting oversight of workers’ comp cases. “Our examination of workers compensation estimates that 40 percent of workers costs are related to abuse or outright fraud.”

McCrory said such claims have cost North Carolina taxpayers $896 million during the past six years.

“That’s about $150 million annually, which would have paid for a 2 percent pay raise for state employees every year,” McCrory said, adding that his administration will “we will launch a major effort to stop fraud and abuse dead in its tracks.”

The veracity of the 40 percent claim was immediately questioned by workers’ compensation experts and an organization that represents state employees.

“We are disappointed in the governor’s attempt to blame workers’ compensation costs on the state employees who put their lives on the line every day for North Carolina, whether in the prisons, on the highways, in psychiatric facilities or elsewhere,” said Ardis Watkins, director of government relations for the State Employees Association of North Carolina. “We cannot find any credible source that shows his 40 percent of costs claim to be anything other than implausible and illogical.”

McCrory’s office did not respond Thursday to requests from The Associated Press seeking documentation supporting the number.

State Human Resources Director Neal Alexander said Friday the figure was an informal estimate from a state contractor, rather than the result of any audit or in-depth analysis of actual payment data.

“The 40 percent is an estimate, it’s not a solid number,” said Alexander, whose office provided the material on the subject that was incorporated into McCrory’s speech. “It was a number that was thrown out in discussions we had with our third-party vendor.”

That said, Alexander emphasized the state is paying far more to cover workers’ comp claims than would be expected or tolerated in the private sector. A former HR executive at Duke Energy, Alexander said he is working to reduce workplace injuries through improved safety training and procedures at state government agencies.

Alexander said his office will also be closely monitoring workers who repeatedly seek benefits. Alexander said there are 50 state employees who over the years have accounted for 541 separate injuries, totaling nearly $7 million in costs.

“We’re not doing a good job of looking into claims, managing claims, that’s the whole thrust of this,” Alexander said. “We’re talking about the employee that gets hurt, goes to the doctor, goes back to the doctor, and says ‘I need to stay out of work another week.”‘

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