Costly claims drive up city of St. Pete workers' comp tab for 2015

ST. PETERSBURG — City Council members got some unwelcome news about a particular part of the budget recently as Mayor Rick Kriseman outlined his spending plan for next year.

Workers' compensation costs spiked 45 percent in the past year, officials learned at a workshop last week. That is projected to cost the city $3.1 million more in the 2015 budget.

"I'd like to see … what was driving those costs," council member Karl Nurse said. "A $3 million increase is some serious money."

According to city documents, the costliest claims routinely come from the fire, police and sanitation departments, whose workers have some of the most physically demanding duties.

So Nurse and other council members immediately wanted to know: Was it a safety problem? More on-the-job accidents?

The answer, city officials said, is more complicated.

City Administrator Gary Cornwell said one of the big drivers is the types of claims, not necessarily the number.

"The number of claims is down," he said. "What we've got is an increase in high-cost claims. … And there's really no magic wand when you're looking at high-cost claims. … I'm hoping it's a blip."

City officials wouldn't give examples of recent high-cost cases, citing patient confidentiality, but they could come from many sources — from an accident with serious injuries to someone with chronic health issues that require ongoing care.

The city's total workers' comp payments in fiscal year 2013, which include everything from salary and benefits to medical costs, amounted to $6,437,788. To date, the payments for this fiscal year are at $4,773,682.

Workers' compensation is one of the most complex areas for the human resource department, director Chris Guella said. It is regulated heavily by the state, he said, and often can be unpredictable.

"Safety is something you always need to keep in mind," he said. "We have enough experience that we can usually predict the number of claims in a year, but not the severity."

So if, for example, they notice a rash of claims from a certain department, the may go to that department and see if safety procedures need to be beefed up.

"Frequency of claims is something you can usually do something about," said Cathy Bernoskie, the city's risk manager. "When it's a severity of claims, these things are more out of your control."

Last year, the city saw 396 new claims out of 784 total open ones, officials said. So far in this fiscal year, there are 622 open claims; 230 of them are new.

About two-thirds of the extra $3 million officials think they will need in next year's budget is because of claims from the sanitation department and the Police Department, officials said.

Police claims are driven by more than just regular workplace injuries that could happen when, for instance, an officer struggles with a suspect during an arrest, Guella said. Several years ago, a state law created additional workers' compensation benefits for law enforcement officers and firefighters. It is referred to as the "heart and lung presumption," in general terms.

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It basically means that cities can be largely on the hook for many heart- or lung-related illnesses those two employee groups develop, because Florida law assumes their jobs contributed to the condition.

"Because public safety jobs are perceived to be so stressful in and of themselves, there's a presumption that if an officer has something like heart disease or hypertension, it's related to the job," Guella said.

It's up to a city to prove otherwise, Bernoskie said, even if officials suspect an employee's own health habits are the cause of the illness.

"It's very hard to disprove a presumption," Bernoskie said. "Very few of them are successful."

Officials have seen more of these types of claims recently, she said.

They often can be more expensive, she said, since they frequently require ongoing care.

But, she said, payments across the system can rise no matter what as health costs continue to increase.

"Hospital bills can be outrageous for just about anything," she said. "I think anybody can relate to that."

Kameel Stanley can be reached at kstanley@tampabay.com or (727) 893-8643. Follow on Twitter @cornandpotatoes.