HAMMOND | Exploding medical claims may have torched the city's self-insurance fund, but a few million dollars in added liability costs threw some fuel on the fire.
Records provided by the City Controller's office show medical claims, recorded at $8.1 million in 2001, increased by about $2 million a year until 2003.
Costs then hovered around $13 million annually before exploding to $17 million at the end of 2006, the documents show.
During the same period, annual liability costs rose from a low of $1.3 million in 2003 to a high of $2.7 million in 2005, the records indicate.
Liabilities began to exceed the $2 million mark under the administration of Mayor Thomas McDermott Jr., closing 2004 at $2.1 million. Costs rose to $2.7 million the following year and dipped back to $2.2 million at the end of 2006.
For a three-year period prior to McDermott's taking office, liability costs ranged from an annual $1.3 million to $1.6 million.
In January, city officials said 75 percent of the money spent since 2004 has gone toward disposing of cases inherited from the previous administration.
The city still faces millions in potential legal costs stemming from the wrongful conviction suit won by Larry Mayes. Mayes was imprisoned for 19 years for the abduction and rape of a Hammond woman until DNA analysis set him free in 2001. His trial ended with a jury awarding him $9 million.
By early this year, the Mayes case had cost the city more than $500,000 in legal fees. Attorneys for Mayes petitioned the court for an additional $1.4 million, though they will accept less if the city loses its appeal.
Eichorn & Eichorn are the city's primary legal services provider, but many other attorneys affiliated with Hammond show up regularly on the city's claims list.
In comparison, administrative and consulting costs to the $19.6 million fund barely register.
David Baker, of Professional Claims Management, the third-party administrator for the city's medical plan, said his administrative costs are $17,000 monthly, or $204,000 annually. Last year, total medical claims topped out at $17 million. PCM's fee was incorporated into that total figure, according to the City Controller's office.
Baker said he is cut a monthly check that averages some $80,000, which covers his monthly fee and the premiums he pays for the city's life insurance, medical stop-loss reinsurance, and organ transplant policies.
