Carmine G. D'Alessandro

Carmine G. D'Alessandro, the Assistant Vice President of Legal Services and SIU IWIF/Chesapeake Employers' Insurance Company. (Lloyd Fox, Baltimore Sun / February 12, 2014)

Police officers rushed into the downtown parking garage, weapons drawn.

As Detective Anthony Fata sat bleeding from a leg wound, officers scrambled around corners and up stairwells, frantically searching for a "junkie-looking black male." The decorated 14-year veteran who'd made the emergency call — Signal 13: Officer Down — told of a violent struggle in which he was shot at close range. He also said that he had fallen down a flight of stairs while unloading his .40-caliber Glock, dislocating a shoulder.

But within days of the fruitless search for an assailant, doubts arose about Fata's version of events. And in the months that followed, it unraveled completely. After he sought workers' compensation benefits worth about $78,000 for his injuries, prosecutors said he had actually shot himself, and he was convicted of perjury and fraud.

Fata's conviction last year was an unusually high-profile example of abuse in Maryland's workers' compensation system, which made $395 million in awards in 2013. But state officials and other experts say the recurring problem helps drive up costs that Maryland taxpayers ultimately bear.

"Where there's money, there's going to be crime. And where there's government money, it's even more," says Frank G. Scafidi, director of public affairs at the National Insurance Crime Bureau, which represents 1,100 insurance companies. "There are people who know how to game the system, and they're good at it."

A Baltimore Sun analysis of hundreds of documents obtained through Public Information Act requests, as well as court records, showed a number of claims that were found to be fraudulent.

For instance, in recent years, the state won a $42,000 theft case against a city Housing Authority employee who worked a second job while claiming to be unable to perform his city duties due to "feeling a pain in his elbow." In another case, a state Developmental Disabilities Administration employee was caught "double-dipping" on a second job. And a city jail employee who claimed he couldn't work because he'd injured his shoulder lifting equipment was caught moonlighting.

Carmine G. D'Alessandro, assistant vice president of legal services for Chesapeake Employers' Insurance Co., which handles such claims for the state government and private companies, says claims officers frequently must beat back questionable cases. Usually, he says, claims officers are faced with exaggerations, rather than baldfaced lies.

"The general consensus is that only 5 to 10 percent are the bad apples," he said. "Ninety percent are pure legit. It's that 10 percent that muck it up. ... When you're embellishing to get more money, we just try to beat you back. Now, are those little white lies adding up? Of course, those are adding thousands of dollars to the system."

Chesapeake Employers' Insurance also scrutinizes doctors. A review of cases spurred an investigation by the state Board of Physicians that resulted in the revocation of an orthopedic surgeon's license in February.

Local government officials are concerned about rising workers' compensation costs — for example, claims and other program expenses such as attorney fees cost Baltimore $49 million last year, up from $44 million two years earlier. The system is designed to compensate government and corporate workers injured on the job for lost wages, medical expenses and any lasting disability, such as the partial or total loss of a body part.

Local officials say they vigorously fight claims they believe to be false. But they acknowledge that they have little power over payouts ordered in appeals to the state Workers' Compensation Commission — or over Maryland law, which sets rates for awards.

"When somebody gets hurt on the job and things are legitimate, we want them taken care of," said Douglas Kerr, the city's risk manager. "If you're going to play a game or try to work the system, our goal is to try to nip that in the bud and keep our costs down."

Workers' compensation payments can total tens of thousands of dollars. Under state law, employees who are too injured to work can receive two-thirds of their salaries, tax-free, up to $998 a week.

Once workers reach what doctors consider "maximum medical improvement," the law permits payments of up to $167 a week for less severe injuries such as bruises, $333 a week for more significant injuries such as those requiring surgery and $749 for injuries that seriously limit the use of an arm, leg or other body part.

The length of payment varies according to the injury. An injured back entitles an employee to as many as 500 weeks of payments; a damaged arm or leg is eligible for up to 300 weeks; and injuries to a foot, hand or eye can bring payments for 250 weeks.

For example, if a doctor deemed that an employee's foot was 20 percent permanently damaged, that would mean 50 weeks of $167 payments — for a total of $8,350.

Localities can provide more generous benefits for lost wages. In Baltimore, city employees too injured to work receive temporary disability payments equal to 100 percent of their salaries, without taxes deducted. Budget director Andrew Kleine says the city is trying to negotiate a reduction in benefits to two-thirds of an employee's salary, which he says is in line with what other jurisdictions pay.

An agency star

For much of his police career, Anthony Fata was an agency star, earning 14 awards and commendations.