New-York tribune., 1919-12-01
Insurance Fund Is
Due for Shake-Up
After Graft Expose
Governor Smiths Investiga-
tor Recommends Reforms
to Eliminate "Runncrs"
and Dishonest Physicians


organization and change of its sys-
tenn Of operation as result of the
graft exposures made through lnvestl-
CATION by Jeremiah +. Connor.
Recommendations have been made in
a final report of Governor Smiths in
vcstigator which, if adopted, would so
safeguard the handling Of funds des-
tined to benefit injured workers of the
state that grating by runners" dis
honest physicians and lawyers would
be next to impossible.
There are twentyscvcn such recon-
mcndatons and it is intimated that
the Governor will attempt to have them
carried into execution in the near
future.
The investigation already has had
farreaching elects. Among the re-
suits enumerated in Mr.. Connor's re-
port are:
Samuel Epstein, an interpreter,
pleaded guilty to an Indictment charg
ing graft.
William A. Herman, claim adiustcr,
confessed to share in tho alleged
graft ring.
Harry Jacobson, claim adjuster;
Frank J. Eiwood, underwriting clerk:
Abraham Bernstein and Barney Way
neck, former employees of the commits
sion, are under indictment.
Commission to Fix Fees
One of the important recommends
tions of the investigating commissioner
is that it be made a misdemeanor to
receive any fees in connection with the
settlement of an industrial claim for
personal injuries except as determined
by the commission. This, it is thought,
will make impossible the large con
tingent fees that have been collected
by "runners,' physicians and lawyers
A body of physicians, selected on
recommendation of the medical socie-
ties, is recommended as a means Of
safeguarding the interests of injured
workmen, it being specified that they
may select any member or mennbe of
this designated body.
1t is set forth in the report that in
a ma jority of cases where rehearings
were held after awards had been made
under the old system the original find
ing had been unfair to the claimant
Investigation of ia cases of personal
injury settled by the state fund showed
that $13,712 had been paid, whereas
total Of $52,2 was paid on rehearing
of the cases.
Resume of Report
In resume Of the report ssued from
the Offices of the investigating COM
missioner yesterday Deputy Commits
sioncr Thomas J. Curtis is criticized
for his handling of the affairs of the
fund. The report, in part, follows:
"Weeks and sometimes months are
taken by the claims division of the In
dustrial Commission to get the claim
ants case in shape for hearing be-
fore the Deputy Commissioner. 1t is
inconceivable that the Deputy Commits
sioner cannot take q few minutes prop
crly to examine the papers and the
claimant and to see that he or she
gets full justice.
In my opinion one reason for the
underpayment in the final adjustment
cases is pure carelessness on the part
of the Deputy Commissioner, and | be-
licve it is also due to the fact that he
is either unable or unwilling to resist
the persuasion of the representatives
and physicians employed by the insur-
ance carriers.
While underpayments were the rule.
excessive awards also were found in the
inve stigation.
"The clerks implicated in The graft
charges worked on the ignorance of the
claimants.
Criticizes Medical Division
"a number Of unfortunate conditions
are reported to exist in the medical
n yrp oh, Nv 7
chief medical adviser. Bills for ex-
perts employed by the commission are
forwarded to the insurance carriers by
the medical adviser and the check pay
able to the physician rendering the
service Is forwarded in the same man
ner.
"The fact that the bills for these ex-
perts are sent through the chief medi-
cal adviser and paid through him
creates suspicion. The specialists
fees are almost invariably higher than
physician is employed by a patient or
an insurance carrier directly.
"The medical service of the state
fund is condemned because of con-
stant effort to take claimants away
from the hospitals in New York City
in order that they might be treated at
the dressing stations of Dr. Meyer
olt. The income Of DR.. Wolff from
the State Insurance Fund is placed at
$4,000 year.
&c. ". Wynkoop, who acted as in
surance agent for many employing
firms, doing business under the name
of the Wynkoop Agency, is said by Mr..
Connor to have received substantial
favors at the hands of the manager of
the State Insurance Fund.
"The attachment of the Wynkoop
service to publicly administered state
fund is condemned as scandalous and
reprehensible."
The report absolves individual mcm-
bers of the State industrial Commis-
sion from blame for conditions dis
closed on the ground that RESPONSE
bility was so divided that little blame
could be attached to any one person.