COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON LAW AND GOVERNMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, 6/14/01 1:15 p.m. - - - RESOLUTION 000476 - Authorizing the Committee on Law and Government to investigate whether the City-administered health plan currently and in the past has provided the most comprehensive and cost-efficient coverage to City employees for the premiums paid, and whether the City Could provide more comprehensive and less costly coverage to the approximately 8,000 employees and retirees currently covered by this plan if other options were pursued. PRESENT: COUNCILMAN DAVID COHEN, Chair COUNCILMAN ANGEL L. ORTIZ, Vice Chair COUNCILWOMAN JANNIE L. BLACKWELL COUNCILMAN MICHAEL A. NUTTER COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 6/14/01 LAW AND GOVERNMENT COMMITTEE I N D E X Thomas Lamb, Administrator. . . . . . . . . . Law Enforcement Health Benefits - Philadelphia FOP Lodge 5 Blue Cross Health and Welfare Fund Linda Berkowitz Deputy Secretary. . . . . . . 14 Financial Oversight Bob McAlister, Benefits Administrator . . . . 59 AFSCME District Council 47 Tom Cronin, District Council 47 . . . . . . . 61 Louise Simpson (position not identified). . . 65 3 6/14/01 LAW & GOV'T - BILL 000476 P R O C E E D I N G S
The Committee on Law and Government is resuming the recessed hearing from two days ago, and there is a continuing quorum since this is a recessed hearing. Now, before I call Miss Berkowitz, there has been handed to me a document saying 7,082 -- I assume that means people injured-on-duty occurrences between July 1993 and February 2000. I assume that's a report on the FOP, and I would like to ask the representative who presented this to the committee to come forward and just explain briefly to us what this is. (Witness comes forward.)
And Miss Berkowitz -- and thank all of you for your patience. The Committee also votes -- thinks that Councilman DiCicco is entitled to a vote of thanks because if he had not withdrawn consideration of two bills before the City Council today --
-- I think we would be in session till about 4, 5 o'clock, maybe midnight tonight. So we're very glad we're able to 4 6/14/01 LAW & GOV'T - BILL 000476 keep within general time limits. Sir, identify yourself for purposes of the record and then proceed.
Yes, sir, Mr. Chairman. My name is Thomas Lamb, L-A-M-B. I administer law enforcement health benefits, which is the Philadelphia FOP Lodge 5 Blue Cross Health and Welfare Fund. I testified on Monday of a great concern to our members about the City not assuming the financial responsibility for officers injured on duty and/or killed in the line of duty. As you know, in July of 1993 -- and that's why this goes back to that date. In July of 1993, the City of Philadelphia was successful in financially capping our medical contribution for the FOP members, but the at the same time, they did not assume the financial responsibility of officers that incurred medical claims for an on-the-job occurrence. So at the same time while the City was financially capping our contribution, they were in essence dumping medical claims into our usage, which equates to a higher Blue Cross premium, which is now having a serious, a financial effect on the FOP Blue Cross 5 6/14/01 LAW & GOV'T - BILL 000476 medical plan. This is an exhibit and I wanted to bring this to the committee because we have heard the same thing over the last seven contracts that you have been hearing for the last year. We're reviewing it, we're working on it. I was not aware of it. This exhibit was presented by the FOP in the 2000 contract negotiation, so no one from the City can say they were not aware of it or they're working on it. At that time, the City, under the discovery, produced injured-on-duty reports complete up to November of 1999, partial reports for December, January, and February. At that time, there were a little over 7,000 injured-on-duty occurrences. Currently, there's over 8,000 injured-on-duty occurrences. What I did to even make it even more dramatic, if you will, the next page is from our Website, the FOP Website, and we call it the FOP Honor Roll. Regretfully, these are officers that were killed in the line of duty. And you can see I put a little dot next to three names. Regretfully, the third name I have to leave the office and could not bring the claims that we paid. 6 6/14/01 LAW & GOV'T - BILL 000476 But if you look, the first officer that was recently killed in the line of duty, the top line of that is our Blue Cross paid claims tape, so every claim that we pay for police officers through the FOP, we receive a monthly paid claim statement. And for this officer, who was severely injured, critically injured, and was -- basically, the plug was pulled about three days after the injury was occurred, we were charged by Blue Cross to charge them out with $1700, and our fund with the Blue Cross discount was charged $400. The next example of the other officer -- he was killed on January 19, 1996. It was ruled injured on duty, and the City did contest this as an injured-on-duty occurrence. It eventually was ruled injured on duty, and you can see our fund paid over $5,000 for this officer killed in the line of duty. This is all part of the over 8,000 injured-on-duty claims that the City refuses to accept the financial responsibility for. If you carry that one step further, injured on duty we define as officer falls down the steps or gets involved in a fight and returns to duty within a reasonable amount of time. We define 7 6/14/01 LAW & GOV'T - BILL 000476 Worker's Compensation as an officer that cannot return to duty and perform the functions of a police officer. It usually goes to Worker's Comp. Board, it drags on for a couple of years. The officers have a choice to use the attorney of their choice, so if they choose to use an FOP attorney, that's fine, we would be aware of any favorable ruling. But if the officer chooses to use an independent attorney, we would have no 11 knowledge of that. So the only central point that we can identify Worker's Compensation awards in favor of the officer is the City of Philadelphia. They blatantly refused to give us any information on officers that have received favorable Worker's Compensation.
And just on this one officer -- of course, we picked one of the more extreme. Just on this one officer, there were $662,000 in claims that is City responsibility that our members paid for on a financially capped contribution from the City. It's just blatantly unfair. To even take it a step further, with the ones that I highlighted, when we eventually do resolve this with the City, and the only thing 8 6/14/01 LAW & GOV'T - BILL 000476 holding it up from what I understand from our attorney is the City signing the agreement to allow Blue Cross and Comp. services to sit in front of a computer, look at when the officer was injured, the type injury, and then look at the claims the officer incurred, and properly apply the responsibility where it lies. Well, one of the problems we have, if you look at this, and this was taken -- this is again an exhibit from our FOP contract presentation in the year 2000. If you are a Blue Cross reviewer and you look at number 2, the officer, the second on the list, the City listed his injury as a fracture. Well, if the Blue Cross reviewer goes into their computer and sees the injured-on-duty occurrence was a fracture and in reality it was death by auto accident. And I did just a few more. Laceration and puncture: It was a gunshot. Concussion: Fell down the steps, struck their head and died. Contusion: It was nine knee operations by non-board certified City doctors. Laceration and puncture: It was a 9 6/14/01 LAW & GOV'T - BILL 000476 gunshot that almost blew out all of his teeth and involved dental implants. The problem with this terminology is when you go in and evaluate the injury and the claims incurred, it becomes awful difficult to tie in a laceration to an auto accident and a death. The Blue Cross person may say, Oh, maybe they went to the doctor in the morning and went to work on the 3-to-12 shift and was involved in an accident and died. So it's very, very confusing, to be fair. The last thing -- well, two things, if the Chairman doesn't mind. Our members regretfully are involved in circumstances -- depending on the circumstances and depending on the individual officer, we do experience posttraumatic stress or some emotional problems caused by what human beings do to other human beings out there. The City of Philadelphia blatantly refuses to recognize any emotional problems caused by an on-the-job occurrence. I have documentation in here where we had requested from the City of Philadelphia if an officer has an emotional problem from a job occurrence and goes to our employee assistance unit, 10 6/14/01 LAW & GOV'T - BILL 000476 the EAP Unit, which is staffed by police officers, I asked for documentation. If the police officer working the EAP Unit feels the officer that has the emotional problem needs a more professional level of care, what are their instructions? Their instructions are in here and what it basically says is send 'em to the FOP Personal Choice Program because we have nothing.
Well, Mr. Lamb, I don't want to interrupt that, but this committee is not going to be able at this hearing level to deal specifically with those items that you're referring to, but I would hope that during the summer, you will be in touch with our staff so they can get all of the information and see to what extent it's related and to what extent we in Council can give you and your organization assistance in resolving these matters with the City. We're very concerned about it and we think the documentation you presented to us is very important. As a matter of fact, it played a role in a matter that was before City Council, and I think City Council is growing increasingly sensitive as a result of the unfair way in which many members of 11 6/14/01 LAW & GOV'T - BILL 000476 Council feel that firefighters have been treated on hepatitis C. There had been a motion to table on one bill today certain parking revenue aspects for the stadium, and the reason the motion to table was taken was to attempt to put pressure on the City. It came within one vote of passing City Council, so that the efforts of the --
Well, Councilman Ortiz would want to claim that at one moment, it had passed, but then one Councilmember changed his vote. And by 9 to 8, the motion failed. What's important is merely that Councilmembers are exceedingly aware, whichever way they voted on the item, they are getting very conscious of the importance of finding a way to make the City deal fairly with the employee representatives on all the health and medical matters. So you're all making progress, but you've got to help us during the summertime by making information available. I want to note the presence of the 12 6/14/01 LAW & GOV'T - BILL 000476 committee. To my far right is Councilman Nutter.
We're not talking politically, right? And to sort of my immediate right is Councilwoman Blackwell, the Majority Leader, and two staff members, Stanley Shapiro, and Shoshana Bricklin and myself, David Cohen, as Chairman of the committee. And to my left -- not really, but to my left are Councilman Angel Ortiz and Councilman Rizzo.
Councilman Ortiz's to my left, okay. It's comfortable to not be all the way on the left by myself. But we are very conscious of the problems you face and very conscious of our needs, but I wanted the record to disclose the reference to this because this will be an exhibit, and we will note that by now, the number would be over 8,000. And the other questions that you raised are very important, but I think they first have to 13 6/14/01 LAW & GOV'T - BILL 000476 go through our staff members so we can group them, analyze them, and see where they fit into our hearing schedule. We thank you for your testimony. Does anybody have any questions of Mr. Lamb?
Could you please clarify for the record that this number is sworn officers and does not include any civilian personnel from the Police Department. Could you just be clear on exactly what these numbers represent, please?
Yes, sir. Yes, sir, Councilman Rizzo. That is from the active -- every occurrence was an active police officer during the performance of their job. It has nothing to do with other union members; it's only police officers.
Councilman Cohen and the rest of the committee, it's a great relief to me and the FOP that there is someone in the City that cares and 14 6/14/01 LAW & GOV'T - BILL 000476 is very concerned about fairness. And we greatly appreciate it. Thank you very much.
Miss Berkowitz, we're going to ask you to come forward so that we may find the status of -- on a number of items that were requested by the committee. (Witness comes forward.)
Is there any additional documentation that you are prepared to present to the committee today?
Good afternoon, Councilman Cohen and members of the committee. I'm Linda Berkowitz, Deputy Secretary of Financial Oversight. I have been asked to come back and report on two items. Specifically one is the status of the IOD issue just discussed by Mr. Lamb, and the second was a request for a list of retirees and addresses.
And really a third on which it's going to be continuing until we get a 15 6/14/01 LAW & GOV'T - BILL 000476 definitive answer, and that is on any plan which would establish the City's contention that unifying all of the health plans would be economical and more efficient -- more economical and more efficient than as they are being run today particularly by the four employee groups and the City, which is the fifth group.
I understand, and I cannot add anything more today than I said Tuesday or last week.
With respect to the two issues that you specifically requested, I come back and talk about them today. One, let me start with the IOD.
Well, let me tell you why it's so important for you to try to determine 16 6/14/01 LAW & GOV'T - BILL 000476 whether there ever was a plan because you may put the committee in a position where we will have no 4 alternative ever to conclude anything other than that there never was a plan and that, therefore, there was great impropriety in the bargaining process if there was a contention by the City that it had a plan when, in fact, there was no plan. And that's the reason I'm persistent. I'm hoping that you're going to be able to give us evidence that there was a plan and show us what it was. Otherwise, we're going to have to conclude that there was a fraud and a deception practice during the bargaining by the City. And that's a conclusion, I'm loath to reach, but if you don't offer us any opportunity for any other conclusion, that's the one we're going to have to reach. So that's the reason for my persistence. It's in my interest to try to establish that the City acted in good faith, and that's the reason we raise these questions. So I leave it to you. That's why we're persistent. Now, as to the two matters -- oh, Councilman Nutter.
Thank you, 17 6/14/01 LAW & GOV'T - BILL 000476 Mr. Chairman. First, I believe in the series of hearings there have been about this particular issue, I believe that I missed the last hearing, which may have taken place in the past couple days, and I was somewhere here in the building attending to other Council business. I apologize for missing that particular hearing, although I will be reading the notes of testimony. I was slightly confused, and Mr. Chairman, with your indulgence, I would like to go back to this issue. I thought I remembered back at contract time, there was discussion or at least a news at least a news account, if not a pronouncement, somewhere in mid-June of 2000 -- the contract expired June 30, I believe.
And discussions went beyond the contract time, but I thought the City did announce at that time that one of the items that was being pursued in this particular contract negotiation -- I think it was for a nonunion formed workers, initially DC 47, DC 33 -- the idea of everyone being in the same health care plan and that 18 6/14/01 LAW & GOV'T - BILL 000476 there would potentially be certain savings as a result of, quote/unquote, a consolidation of health-care services. Now, is that correct? Do you have any recollection of a report back at that time?
Okay. And can you share with me how that came about? Or what was the proposal at that time?
I really can't. I came into the labor negotiations very late, I did not enter into them until June. And what I have stated on the record --
And that's about the time that the proposal was made, right?
Well, what I stated on 19 6/14/01 LAW & GOV'T - BILL 000476 the record last week and this week is that I have never seen a comprehensive plan for consolidation. There was the issue of consolidation was discussed.
I was actually not in the rooms when the plan was discussed. I do not have information on consolidation, Councilman Nutter.
I can't tell you; I don't know who was in the room. I'm assuming that the City's official labor negotiation teams, the 20 6/14/01 LAW & GOV'T - BILL 000476 corps of the team, was in the room.
I believe that -- from what I understand, the idea was that through consolidation, there would be potential savings in terms of the overall cost of health coverage.
Councilman Nutter, would you yield for a moment on that last question?
Wasn't there in fact discussion about a study that had been made by the City which revealed there would be at least $18 million in savings?
Wasn't there that specific discussion? 21 6/14/01 LAW & GOV'T - BILL 000476
I can only repeat what I have already said. I am not prevaricating. I am telling you that I have never seen a comprehensive plan for consolidation.
There may have been -- were number of times, it's my understanding, discussed. I do not -- if I knew what those numbers were then, I do not recall what they are now. It has been a year.
Well, someone must have told you these things at some point in time.
I was told -- I was aware of it from discussions from the corps of the City's labor negotiation team.
Those were the City's outside counsel, the City's Office of Labor Relations.
I'm sorry. As you well know, I've never been a party to a contract negotiation, so I actually don't know -- who are these --
Bill Graub is the Director of the Office of Labor Relations.
Mm-hmm. And which one of them discussed this with you?
General or specific? I didn't ask which one, just -- 23 6/14/01 LAW & GOV'T - BILL 000476
Yes. There were not general discussions with me personally; there were general discussions among the City's labor negotiating team.
What was actually discussed with union leadership I cannot describe that.
Well, I'm not asking you to discuss what was discussed with union leadership. You're -- now, you've held a number of positions in the government; is that correct?
Okay. And in the past, you were, I think, in the Office of Management and Productivity? 24 6/14/01 LAW & GOV'T - BILL 000476
Okay. When you have an initiative in that particular office or in your new office that will have far-reaching or long-term effects, is it something that usually comes as a result of a series of discussions of a wide variety of people? is it something that requires a fair amount of study and data-gathering? How would you go about implementing a new policy in the City?
And I understand what all of the assumptions underlying the numbers are.
So based on that, if you were in a discussion with someone about this kind of concept, you would then naturally ask them 25 6/14/01 LAW & GOV'T - BILL 000476 what is the concept based on, right?
Okay. Did you as anyone what the source of these numbers or discussions were?
I just can only tell you that I have never seen anything that would meet my test of comprehensiveness, and that is what I have testified to here.
Well, I understand that. And, again, thank you, Mr. Chairman. My experience is, in this kind of discussion, if a person utilizes a particular term on a number of occasions, it must have significance and meaning, and so you have said to us now on at least three different occasions that you have not seen a comprehensive plan, which then would generate the question, if you had seen a comprehensive plan, where is the plan? Therefore, what did you see that was less than your test of a comprehensive plan? Did 6/14/01 LAW & GOV'T - BILL 000476 you ever see a document?
The document was estimated savings; I do not recall what those estimated savings were. The document was estimated savings. And at the time, I did request additional information in terms of assumptions.
I believe it was an outside consultant, and I do not recall their name.
Did I ever have that document? 27 6/14/01 LAW & GOV'T - BILL 000476
I don't know that they would not give me a copy. I did not have a copy.
Okay. You made a request for additional information; what happened to that request?
Someone -- now, wait a minute. At the time, what was your position?
Well, at the time, I was 28 6/14/01 LAW & GOV'T - BILL 000476 the City's Budget Director.
Okay. So let me try to understand this. The City's Budget Director, in the midst of contract negotiations, asks a person, or persons, for additional information that is directly related to the contract negotiation, and your testimony here today is that that information was not forthcoming at the request of the Budget Director?
And why would some refuse to give the Budget Director Information?
I don't believe it was that they refused to give it, and I do not wish to convey that perception. They did not refuse to give it. As I think the union membership would attest to, contract -- and it was my first time in contract negotiations as well. It seemed that you were going all of the time, and proposals were being put on the table and proposals were being taken off the table.
Well, from what I've heard, that seems to be the nature of the contract 29 6/14/01 LAW & GOV'T - BILL 000476 negotiation.
My last question, Mr. Chairman, is, of whom, Miss Berkowitz, did you make this request?
I believe I may have made that request of one of our outside labor counsel.
Okay. The document that you saw, you're saying that you never had a copy for yourself?
Have you seen a copy since the negotiations concluded?
So the document has disappeared? 30 6/14/01 LAW & GOV'T - BILL 000476
The document has -- I -- the fact that I don't have it does not mean that the document has disappeared, Councilman.
I would assume that Mark Foley still has a copy of the document.
Could I follow up on that? And I assume that when you made the proposal, you had the union numbers; is that correct?
When there was proposal for consolidation and you were gathering this theoretical aspect, you had numbers from 43 and the FOP and the firefighters and District 33 in terms of how their health plan operated and the finances of it and how much they spent per individual and so on for administration. You had those number, didn't you? 31 6/14/01 LAW & GOV'T - BILL 000476
I can't say that we had those numbers. In fact, it is my understanding that the City has had a great deal of difficulty in obtaining numbers on specific union health plans. We know what we give them in the way of contributions. And in fact -- in fact, I did see a letter yesterday, a copy of a letter that went from Independence Blue Cross to Mr. Cronin, President of DC Council 47 --
I remember. -- pursuant to a request made by the City's personnel director for information from IBC about their rates, and the letter states that he was -- the individual from IBC was awaiting instruction from Mr. Cronin, because in the past, IBC had specifically been prohibited from sharing that information outside of DC 47. And I would be very happy to get members of the committee a copy of that letter if they would like that.
I would appreciate having that copy of that letter. 32 6/14/01 LAW & GOV'T - BILL 000476 In one of the previous negotiations, didn't the City get a concession from the unions to have a City representative on the boards?
Councilman, I really am not here to discuss -- I mean, this is really beyond my bailiwick is discussing the terms and conditions of the City's labor contracts.
I'm just saying -- I'm just saying we're trying to find out how these numbers come about and -- because actually, we're involved. We come under a health plan and we come under the health plan that you have negotiated, and we have some problems in terms of what occurs and doesn't occur. What I just want to know is how it came about. Michael Nutter was asking some questions, and I just want to know how you created the numbers that you were then proposing, because you must have had numbers from the unions because you have members of the City who sit on the union boards, so you know how much they spend. They don't have members on the City side. So I'm just trying to gather how the process worked. That's all. 33 6/14/01 LAW & GOV'T - BILL 000476
Councilman, again, I can only say that it's my understanding that an outside consultant put those numbers together. I do not know the source of those numbers, I do not know the numbers that were used.
I do not know -- I knew the name of the consultant; I do not recall the name of the consultant.
Miss Berkowitz, procedurally, I'm a little mystified. You know, you are not limited by this committee to find out information. You say in reply to an earlier question from Councilman Nutter that Mark Foley had a document -- and you believe he still has it -- that pertains to the plan or savings under a plan or something. Have you asked him for it?
Councilman Cohen, I think Joyce Wilkerson and I both testified last week that I have been asked to do a complete review of all of the issues raised by this committee last year, in March, and again at this time. That review is not done. I do not -- 34 6/14/01 LAW & GOV'T - BILL 000476
Well, we don't intend to wait until you decide that you have finished that review.
Well, did you collect -- we've raised questions about a plan or a document or something.
Have you made efforts to locate if you yourself don't have it?
I have made efforts to collect all information that pertains to the issues raised by this committee last June, in March, and now. As we -- as we testified last week, the documentation regarding the City's -- the City-administered plan is poor.
How does that relate, say, to the question I asked you, did you ask 35 6/14/01 LAW & GOV'T - BILL 000476 Mr. Foley if he still has a copy and would he give it to you because the committee has asked for it?
I actually do have a job, Councilman Cohen. I'm sure you can understand that.
I would like to suggest it might be the most important part of your job.
Councilman Cohen, I think all of the issued raised by Council I take -- 36 6/14/01 LAW & GOV'T - BILL 000476 are serious and I take them seriously. I cannot provide instant gratification. I dot not have a lot of the documents, I don't know what is in a lot of documents, I don't even know the universe of documents. I am attempting to find out everything I can about all of the documentation pertaining to every issue raised by this committee last June, in March, and now. I cannot tell you anything else. If --