Synopsis: Illinois Employer Saves Money on Medical Costs by Legally Using Lowest Rate Negotiated by Injured Worker's Insurance Carrier. 11-year-old Knee Injury Claim May Finally End!!
Editor’s comment: The Illinois Appellate Court, WC Division ruled the Illinois employer’s liability for an injured worker’s medical benefits was limited to the amount actually paid to the treatment providers, even if they were paid at a discounted rate negotiated by the worker’s personal health insurance carrier.
In Perez v. IWCC, issued 1/9/2018, Claimant Perez worked as an assistant manager at a Wendy’s restaurant. She allegedly injured her left knee in June 2007 when she slipped on a wet floor at work. She received medical care, including surgery, which was paid for by her private healthcare insurance.
The insurance carrier made payments of $17,597.96 for Perez’s care, and she made copays of $260, but Counsel for Wendy’s conceded the IL WC Medical Fee Schedule would have required payment of $37,767.32 to the healthcare providers and surgeons.
In April 2011, former Arbitrator Kinnaman found Claimant Perez’s knee injury was not work-related. The Illinois Workers’ Compensation Commission agreed, as did a circuit court judge.
Claimant Perez sought review by the Appellate Court, WC Division. In March 2014, the Appellate Court reversed in one of their unusual and controversial “secret” or “non-published” rulings, finding Claimant Perez’s injury was compensable.
Having reviewed that 20-page “sort-of-unpublished” ruling, the Court’s members made all sorts of important evidentiary findings and legal determinations that, in my respectful opinion, should always be published.
On remand, the IWCC determined Claimant Perez was entitled to about four and a half weeks of temporary total disability benefits, as well as 43 weeks of benefits in the amount of $288 per week for the permanent loss of use of her leg.
The Commission panel also ordered Perez’s employer to pay her medical expenses but did not specify the amount. An appeal followed and a circuit court judge later ordered the Commission to determine the amount of medical benefits due to Perez.
After the case was remanded again, the IWCC ordered the employer to pay Claimant Perez’s medical providers $17,857.96. The circuit court upheld the Commission’s decision.
In their second ruling on this never-ending knee claim, the Appellate Court, WC Division explained the Illinois Workers’ Compensation Act obligates an employer to pay a care provider’s negotiated rate, if applicable, or the lesser of the provider’s actual charges, or the IL WC Fee Schedule amount.
Claimant Perez’s care providers accepted a low negotiated rate from her private health insurance carrier. The Court said that meant the employer was liable only for the amount of medical expenses actually paid, pursuant to the negotiated rate, even though it hadn’t been involved in the negotiations.
The Court’s ruling said “there is no limiting language that requires the employer to pay the negotiated rate only when it is negotiated by the employer or the employer’s own insurance carrier.” Had the legislature intended to limit negotiated rates and agreements to those between the employer or the employer’s own insurance carrier, the court posited, it could have included the restriction.
To read the decision, click the protected link: Perez v. IWCC.
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Synopsis: Do Undocumented Workers/Illegal Aliens Get U.S. State and Federal WC Benefits?
Editor’s comment: This is a very active political football, particularly under the current federal administration. We had a client who found out an injured worker got the job under fraudulent circumstances with fake identification and a false social security number. Our client learns after the injury their former employee fraudulently submitted a dead guy’s personal info when hired. The client now wants to deny the WC claim, confirming the employer wouldn’t have hired the employee because it appears the employee wasn’t legally in the US. If you face such issues, send a reply or contact any defense lawyer at KCB&A. If we can’t help you because you are out of our five states, we will locate someone who can in your state.
By way of background, the U.S. Supreme Court in a claim known as Hoffman Plastics v. NLRB ruled the act of becoming a “phony employee” stripped the worker of the protections of the National Labor Relations Act. It was felt this same sort of proscription would apply to other benefits/protections like workers comp.
Remember one of the preliminary aspects of any WC claim in any state or country is “employer-employee.” The parties have to agree or the hearing officer has to take evidence and find the worker is a “valid” employee under a valid employment contract with the employer to obtain benefits.
In Hoffman Plastics, the U.S. Supreme Court appears to indicate a worker can’t be a fake or fraudulent employee and be entitled to the statutory benefits of being an employee.
Many states, particularly those with liberal legislatures, don’t agree and don’t cite the federal ruling in Hoffman Plastics when they rule. If they want to award benefits, they simply call the worker an employee and write/affirm an award.
I am fairly confident there is an IL Appellate Court ruling where a woman who was not properly or legally employed injured her shoulder, had permanent restrictions and returned to a foreign company. As a U.S. worker she could make as much as $10 an hour or more. In the foreign country, she might make a dollar and change a week. In short, under some state work comp plans, such a worker would get very substantial benefits due in part to the fraud being perpetrated on the employer.
In the claim I am referring to, I believe the IL WC Appellate Court awarded lifetime “wage loss differential benefits” at the highest possible rate. In my respectful view, the Court’s members were unconcerned about the fact the worker was illegally employed in this country and could not legally be placed in other work in the U.S.
The award was almost certainly worth more than a million dollars—I believe the IL WC Commission and reviewing courts wanted such a ruling to make clear the risk IL employers face in trying to save a couple of buck to hire an undocumented or illegal worker.
From my perspective, I can also see a federal or state RICO action being brought to counter the WC claim. The damages could be the benefits awarded. I have no idea how that would come out.
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Synopsis: Governor Rick Snyder has announced the appointment of attorney John M. Sims to the State of Michigan’s Workers’ Compensation Board of Magistrates. Reporting by Matt Wrigley, J.D.
Editor’s Comment: Magistrate Sims was admitted to the State Bar of Michigan in 1977 and has 40 years of experience in the field of workers’ compensation law representing both Claimants and Defendants. Magistrate Sims has practiced before all tribunals from the Magistrate level to the Supreme Court of the State of Michigan.
The 17-member Board of Magistrates resolves disputes and hears administrative claims for workers’ compensation disability benefits, survivor benefits, and occupational diseases arising under the Michigan Workers' Disability Compensation Act.
New Magistrate Sims holds a bachelor's degree in political science, history, and literature from the University of Michigan and Juris Doctor from Wayne State University Law School. He fills a vacancy and will serve a four-year term expiring Jan. 26, 2021. His appointment is subject to the advice and consent of the Senate.
Matt Wrigley, J.D. is one of our top veteran Michigan Workers’ Comp Defense lawyers. Feel free to reach out to Matt for assistance and counsel on your toughest MI WC claims at firstname.lastname@example.org.
Learn how to protect your company and your employees from the dangers of Workplace Violence!
Date: This Wednesday, January 24th
Time: 10:00 A.M. - 11:30 A.M. CST
Workplace violence is a growing concern for employers and employees nationwide. Corkill Insurance Agency, Inc. is hosting a complimentary webinar followed by a Q&A on Workplace Violence.
You will not want to miss this event! Our speakers will bring you the knowledge and tools you need to reduce your exposure to liability and Worker's Compensation Claims. Topics to be addressed include:
OSHA on Workplace Violence
Although there are no specific Federal OSHA standards to address workplace violence, the Occupational Safety and Health Act (OSH Act), in Section 5(a)(1), provides that "each employer shall furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees."
What actions must I take to be in compliance with OSHA?
What liabilities do employers face by allowing guns in the workplace?
-Employer's right to control its property and workplace vs. the right to own and bear firearms
-Additional potential liability for employers allowing guns at work
-Possibility of claims based upon unsafe work environments or even OSHA safety violations
-Negligent hiring, retention, or supervision claims
-Potential liability remains unknown because the laws are new and untested
-Litigation costs and costs of settlement to avoid the unknowns of trial
-Vicarious liability for the wrongful acts of employees under common law principles
Strategies to prevent Workplace Violence, including -
-The importance of conducting comprehensive safety and security audits,
-Setting up a zero-tolerance policy toward workplace violence,
-Implementing workplace violence emergency protocols,
-Training employees on how to respond to incidents of violence and how to identify risk factors which may lead to violence
-Practicing active shooter emergency drills.
Eugene Keefe and Bradley Smith
To register for the Workplace Violence webinar, contact:
Christina Anderson, ARM, Safety Manager
Corkill Insurance Agency, Inc. | Website: www.corkillinsurance.com
Direct: 224-239-6762 | eMail: CAnderson@corkillinsurance.com
25 Northwest Point Blvd. Suite 625 | Elk Grove Village, IL 60007
There is no cost to attend this program.