School ends contract with workers’ comp administrator after lawsuit

St. Charles Parish Public Schools has decided to abruptly end a contract with a workers’ compensation claim administrator who attempted to negotiate a settlement for less than what is allowed under state statute.

The insurer, Gulf South Risk Services, had been under contract with the school system for at least three years before a dispute over a claim against the school district spurred a lawsuit.

Scott Fazio, St. Charles Parish Public Schools risk manager, said although the lawsuit was resolved, the decision was made to cancel the contract with Gulf South Risk Services.

“Because of some their actions, and frankly because of some of their inactions, a lawsuit was brought against the district. In order to settle that suit and effectively recover the money that we’re due, I recommended the termination of the mutual dissolution of that contract with Gulf South Risk Services to which they agreed,” he said.

According to Fazio, the lawsuit arose from a dispute over a claim that appears to have been improperly handled by Gulf South.

“The total amount paid for the lawsuit was just under $24,000. However, that was just to settle medical bills which were incurred. (Gulf South) attempted to negotiate below that amount, way under, against state statute, which got us into this,” he said.

Fazio said the lawsuit was dropped after Gulf South agreed to dissolve their contract with the school system and that the cost to the school system was negligible. In the end, the school system paid the medical bills requested under the workers’ compensation claim.

“I can tell you officially with this case we did not settle the lawsuit. They agreed to dismiss it and we just did what we were required to do,” he said.

Fazio said the agreement also came without the school system having to pay above what they owed under the workers’ compensation program.

“We paid what we were billed from the company originally. While that is more than what we should have paid if it would have been done properly, we didn’t pay any exorbitant amount for any fees or penalties. They were very willing to work with us once we terminated our relationship (with Gulf South),” he said.

The school system chose their former workers’ compensation administrator, CCMSI, to finish out the remainder of the contract, which expires in June.

The cost to transfer the contracted services came in at over $13,000.

School Board Member John Smith expressed concern that the School Board was not more involved in the process, especially considering a lawsuit had been filed against the school district.

“When it comes to whether the board has the option to settle the case or continue, that case needs to brought to the table for the board to make some decision about whether or not we want to settle or whether we want to go ahead and continue the case,” he said. “The decision should not be made without consultation of the board.”

School Board Member Clarence “Sonny” Savoie agreed with Smith.

“There should have been documentation and a paper trail following what went on and what was the pending result so we could all be on the same page,” he said.

Superintendent Felecia Gomez-Walker said although the school administration in the past had exercised control over smaller claims made against the school system, they would begin to provide more documentation to the School Board on such matters.

“We will have that in the future,” she said.


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