Coingate Phase II: managed care organizations: task force takes aim at its newest target in the workers' comp investigation.

By: Fogg, Erin
Publication: Risk & Insurance
Date: Tuesday, May 1 2007

There is no end in sight for the two-year-old investigation into the investment practices of the Ohio Bureau of Workers' Compensation--probably because new mini-scandals are regularly being added to the mix.

The three most recent cases to be opened up by the inspector general's office

are investigations into: the bureau's practice of hiring and retaining information-technology consultants, opened July 31, 2006; the bureau's granting of premium rate reductions to some Ohio employers; and the managed care organizations tasked by the state to manage claims filed by injured workers, both opened on Nov. 3, 2006.

Ohio Inspector General Thomas P. Charles provided a brief overview of these cases, collectively defined as Phase II of the investigation, in his 2006 annual report.

The inspector general's office declined comment on the ongoing investigation into the Bureau of Workers' Compensation's managed care contracts.

The Toledo Blade last year published reports that managed care operators have contributed hundreds of thousands of dollars to state politicians, and that the bureau failed to fully investigate allegations of fraud and kickbacks in its managed-care system.

Charles' office convened a multiagency task force in May 2005 to investigate the bureau after the Toledo Blade exposed its $50 million investment into two rare coin funds.

The probe into what has been dubbed the "Coingate" scandal has involved task-force investigators from 11 local, state and federal agencies, which have scanned more than one million documents, conducted 398 interviews and served 584 subpoenas.

The task-force efforts have led to criminal convictions for coin dealer Thomas Noe, sentenced to 18 years in state prison; his business partner Timothy LaPointe; and former chief financial officer of the Bureau of Workers' Compensation, Terrence Gasper.

Several other individuals, including former Ohio Gov. Bob Taft, were convicted of state ethics violations.

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