Dan Lastrapes, an insurance industry veteran who most recently worked with LEMIC as Vice President of Operations, has joined the Second Injury Fund at the Office of Workers’ Compensation Administration as Director, taking over from Pauline Williams, who is transitioning to a new role as Deputy Director of the OWCA under Patrick Robinson. Louisiana Comp Blog reached out to Lastrapes to learn more about his background and what he plans to do in leading the program.
Comp Blog: What is your background and how did it lead you to the Office of Workers’ Compensation and the Second Injury Fund?
Lastrapes: I was born and raised in Baton Rouge and after college at LSU went to work for FARA in 1988. I had stints working in claims with TPAs and an insurer in Louisiana, California and Mississippi for nine years until rejoining FARA in Mandeville in 1997. That job involved working with LEMIC until I actually became a LEMIC employee in May of 2000. With the exception of a two year stint in medical malpractice claims and a year as a liability adjuster, I had 23 years of workers’ compensation experience in claims handling, claims management and executive responsibilities. I have had experience with both State and Federal Second Injury Funds and had dealt with Louisiana OWCA Second Injury Board issues for almost fourteen years with LEMIC. It seemed like a natural fit for me after learning of the posted opening.
Comp Blog: Was the insurance industry your original plan starting out in your career?
Lastrapes: My plan in college was to be a petroleum landman. I had worked in high school and college as a student worker at the Department of Natural Resources for the Offices of Conservation and the State Mineral Board. I had a number of the necessary research skills and had met and discussed a possible career with a number of successful landmen. Unfortunately, from the mid 80s forward, the oil business went to hell and it became apparent my career choice needed a new direction. I remember working in Houma in 1988 and seeing the outskirts of town littered with oil field supply company lay-down yards filled with racks of rusting, unused casing and drill pipe. I was happy I had made the choice to get into insurance.
Comp Blog: What can you say with respect to LEMIC’s decline and how that went down?
Lastrapes: There were many converging events that put LEMIC into a position to be taken over by the Department of Insurance. I will say that we fought with everything we had to turn the ship. We implemented sweeping changes that simply did not have enough time to positively reverse the actuarial implementations. In fact, what we did actually made the numbers worse in order to pave the way for the IBNR reserves to improve. By all accounts, Billy Bostick is doing an excellent job as the appointed LEMIC receiver. I would like to think we gave him a stable base to work from and hope everyone is pleasantly surprised with the outcome of the receivership.
Comp Blog: How have your first several months with the Second Injury Fund gone as you take the reins from outgoing Second Injury Fund Director Pauline Williams?
Lastrapes: Pauline did a fantastic job of building a solid process and a solid team. It has allowed me to observe, ask questions and learn the functions of the team rather than jump in and cause anxiety for anyone. I am learning from the unique perspective of the Second Injury Board’s responsibility to act on behalf of all the stakeholders. The Fund must remain a viable tool to encourage returning previously disabled employees to work. To do that means that valid, well documented claims are reviewed by the Board and approved while less valid, poorly documented claims are denied unless augmented with additional support.
The exciting change at the Second Injury Board is the recent additional expenditure authorization of $10 million per year. That will have the effect of reducing the wait times for reimbursements this fiscal year by about six months and a continued reduction in the next fiscal year of as much as another year. The entire process will benefit from Pauline’s work in getting that increased disbursement authorization from the Legislature.
Comp Blog: Do you feel that experience from the company side makes you uniquely qualified to hold this position, since you don’t come from a regulatory background?
Lastrapes: It makes me qualified but not necessary uniquely qualified. My background allows me to empathize with a self-insured employer, carrier, or group self-insured fund representative about the challenges of getting a Second Injury claim approved and reimbursed. I know the environment they work in and the pressures of their jobs. In some ways, a regulatory background alone might hinder those insights. I hope that stakeholders will respect that when my recommendation to the Board is contrary to their interests that I gave it with the full knowledge of both points of view.
Comp Blog: What are your priorities now that you’ve got the top job at the Second Injury Fund?
Lastrapes: My immediate priorities are to get to know our staff; get to know our stakeholders and get to know the members of the Board that I serve. The most difficult part of the transition so far is getting to understand who to contact for what, what the acronyms stand for, and how to navigate the internal controls that are part of state government.
I am getting to a point where I feel comfortable turning my attention to ways to support, develop and prepare our staff for coming technical changes. The RFP is out and we are within the vendor selection process of developing a software solution to make us more efficient and allow our stakeholders to interface with us electronically. It will be a positive change in the way we do things and will mean shorter turnaround times and less handling of bulky paper submissions. The Department will be releasing more information as that project progresses.
Comp Blog: What are your thoughts about Second Injury Funds in general? They are a declining trend in workers’ comp on a national level, Louisiana is one of just a few states that still has an active program in place.
Lastrapes: In general, Second Injury Funds benefit the stakeholders that utilize them the most. When the number of entities that don’t commit to SIFs exceed the number that do, a state may be headed for decommissioning a fund. That doesn’t end the liabilities on approved cases or the need for future assessments. I think it’s better to make the funds more viable than to end them altogether.
Our Legislature has chosen to remove the sunset provision on the Second Injury Board and increase our authorization for annual disbursements. As a result, we will make real movement toward significantly reduced wait times for recovery. As I said, we are close to awarding a contract that will build the type of computer system we need to make interfacing with our office a snap for stakeholders while virtually eliminating paper transfer and storage. If more states made the commitment our state is making to improve the stakeholder experience while speeding up filing and recovery; then maybe the trend would go the other way.