Steve Duin of The Oregonian, Metro Section
Sing it again, Saif: Denied, denied, denied
Thursday, January 13, 2005
Silence is golden in Salem. You get along to go along. The prevailing rule is that you don't ask questions. And, once again, Sen. Vicki Walker, D-Eugene, is the exception.
Is it possible, Walker asks, that Saif's legendary "savings" in the workers' comp system are based on denials of legitimate injury claims? Is it possible Saif benefits employers while shifting the cost of caring for injured workers to the welfare rolls, the Oregon Health Plan and all of us foolish, taxpaying slobs?
Those are great questions. They were equally astute, and more timely, when Carol Collins asked them 14 years ago.
Collins, 64, retired two years ago from the Department of Justice, where she worked in the child-support program. She was a legal assistant at Saif until 1986, when she ventured into private law practice in Eugene. By 1990, Collins was back with the Department of Human Resources, where her job was to review the files of those who'd fallen into the great safety net.
Collins immediately realized several things had changed since her days at Saif. Neil Goldschmidt was now governor. Ted Kulongoski was the insurance commissioner. And Saif was suddenly denying injury claims -- "legitimate claims," she argues -- at a record pace . . . and bragging about it.
"Most of the denial letters I saw were blatantly obvious," Collins says. "For example: 'While you were in the course and scope of your employment at Dairy Queen, you fell on a slippery floor and sustained a fracture of your right hip; therefore, your claim is denied.' "
Collins says such claims should have been approved with flying colors: "It was like 'Alice in Wonderland.' You fall down the hole. You're at the Mad Hatter's tea party and nothing makes any sense. While I worked at DHR in post-patient recovery, I saw 50 to 100 of those letters cross my desk. I knew something was cooking."
She knew what: "The order of the day was to lower workers' comp premiums to attract new business to Oregon."
That order was so pronounced that by 1991, Stan Long, president and CEO of Saif, announced the corporation "had the lowest number of accepted workers' compensation claims in 11 years" and rewarded his employees with $50 bonus checks and a day off work.
That practice was so egregious that in 1992, Gary Weeks, who replaced Kulongoski as insurance commissioner, ordered Saif to change its claims processing procedures. Weeks said his investigation determined Saif was misreporting claims, unfairly rejecting claims and showing the back of its hand to workers with legitimate on-the-job injuries.
In a December 2003 letter to the Saif board, now-Gov. Kulongoski proclaimed "Oregon's workers' compensation system is the envy of states all around this country . . . The reform of our workers' compensation system, which Neil Goldschmidt and I led in the 1980s, has saved Oregonians roughly $9 billion."
"I'll tell you how they did it," Collins says. "DHR paid for Saif's cast-offs. The employers had low premiums and Saif-issued dividends. The taxpayers paid the costs that should have been paid by the employers."
In 1990, Collins went to her bosses at Human Resources with a plan to determine the extent of that cost-shifting: She wanted to compare Social Security numbers to see how many of Saif's denied claimants ended up on welfare. Her bosses loved the idea, Collins says, but told her "it was not politically correct at the time."
So it was that the status quo was preserved. Political reputations were made. Injured workers were abandoned.
Fourteen years later, Walker argues little has changed. Saif is still denying claims. "The employers are making off like bandits," she says. Private insurers and taxpayers still pick up the tab. When Walker asked John Shilts in the Workers' Comp Division if it could conduct an inquiry similar to what Collins requested, Shilts told her he didn't have the necessary resources. "If the Legislature directs us to perform such a study," he added, "we would be happy to proceed."
Don't hold your breath. Silence is golden in Salem. Apathy reigns.
Steve Duin: 503-221-8597; Steveduin@aol.com; 1320 S.W. Broadway, Portland, OR 97201