A New Jersey task force charged with finding ways to reduce the size of state government is targeting a workers' comp claims administration unit for privatization in a move that could save $4 million annually. Overall, the five-member New Jersey Privatization Task Force reported that privatization efforts across all state agencies could trim $200 million from the state's annual budget.

For workers' comp savings the task force looked at the Division of Risk Management in the state's Department of Treasury, which handles the management and investigation of all workers’ comp claims filed against state agencies. The unit already outsources medical management functions, but state employees still handle overall claims management and investigations.

The task force recommends hiring a third-party administrator through a competitive bidding process to not only save money but also improve efficiency. The task force's report notes that because of turnover and hiring freezes, the state's investigators/adjustors now handle caseloads of 1,000‐1,200 claims each. "The huge case load makes it impossible to do much more than move paper, which results in increased workers’ compensation costs, prolonged worker absence, reduced productivity and increased agency overtime," the report points out.

Gov. Chris Christie signed the executive order back in March to create the task force to examine areas where government services and functions could be provided by the private sector. Other recommendations focused on privatizing all pension, payroll and benefit payment systems; decentralizing all motor vehicle inspections at the state's DMV; and privatizing construction code enforcement.

-30-