Audit of Payments to Workers’ Compensation Medical Providers Under the City of Los Angeles’ Aon Contract

In 2013, City employees filed more than seven thousand workers’ compensation claims, costing the City $191 million. Both our workers’ compensation expenses as a percentage of wages paid (6.6%) and our incident rate per 100 employees (17) were higher than those of our peer cities. The County of Los Angeles, for example, pays 4.1 % of wages and has 11 incidents per 100 employees. The City of San Francisco is at 2.3% and 11.9 per 100, respectively.

Do these numbers point to a system in crisis? They certainly, among other things, raise questions of whether the City and its administrative contractors are doing the best possible job containing workers’ compensation costs. To get more insight into this topic, the Office of the Controller is undertaking a series of audits of the City’s workers’ compensation program.