The dispute over dockworker medical claims that produced a labor shortage at some West Coast ports on Monday resulted from alleged fraud and abuse of the waterfront contract rather than incompetence on the part of the benefits plan administrator, the employers’ association stated today.
Jim McKenna, president of the Pacific Maritime Association, which represents terminal operators and shipping lines in administering the International Longshore and Warehouse Union waterfront contract, said potential abuse of the benefits program, especially by medical providers, totaled as much as $40 million in the first six months of 2013.
“Some are saying the fraud is the worst they have ever seen,” McKenna said.
Marine terminal operators in Los Angeles-Long Beach and Portland Monday reported that the failure of hundreds of longshoremen to report to work resulted in labor shortages that compromised efficiencies at the ports. McKenna said the problems lasted for one day, and operations at all West Coast ports were back to normal today.
PMA on July 8 lodged a formal complaint through the contract’s grievance procedure, and the area arbitrator in Southern California ruled in favor of employers. “This arbitrator finds that the limited number of individuals checked in and accepting jobs clearly indicates a failure of the union and its members to meet their obligation pursuant to Section 8.51 of the agreement,” relief area arbitrator Bobby Munoz stated.
Longshoremen, both active and retired, have complained about the alleged slow processing of medical claims since the beginning of the year when the ILWU and PMA, through an arbitrator, chose a new administrator for the benefits plan.
ILWU members say a backlog of more than 100,000 claims built up as Zenith American Solutions worked to correct problems left over by the previous plan administrator and at the same time handle new claims. ILWU demonstrations over the same issue affected cargo handling on April 30 in Tacoma and May 1 in Oakland.
The union said the fact that additional job actions were taken Monday, more than seven months after the new plan administrator took over, indicates ILWU members have had enough.
“There’s no excuse for the extensive negligence and numerous failures by PMA’s hand-picked claims processor, Zenith American Solutions. The mismanagement of the claims-paying process by the company has been going on far too long now, and there seems to be no end in sight,” ILWU spokesman Craig Merrilees said today.
Merrilees said some ILWU members now face collections actions for their unpaid medical claims. “Legitimate bills need to be paid now, without further delays or excuses,” he said.
The PMA stated that “proper claims are paid on a timely basis.” The problem, according to employers, is that a number of claims are fraudulent, and those claims caused the backlog.
The ILWU and PMA trustees have added a new plan administrator to specifically monitor claims for fraud and abuse, employers stated. Trustees have uncovered the following abuses: billing for services that were not provided; charging for non-covered services such as cosmetic surgery; and inflating patients’ bills by unnecessarily itemizing related charges.
Merilees responded that “the ILWU has a zero-tolerance for fraud and a long record of pushing employers to take a tougher line against suspect providers.”