Synopsis: Easy and Effective IL WC Cost-Cutting Reforms From KCB&A for Governor Rauner and Everyone To Consider.
Editor’s comment: Is there some way to get Governor Rauner to “Turnaround” his obsession with most of his proposed Illinois WC reforms that won’t “work?” We saw a recent op-ed piece in Crain’s Chicago Business by our great Governor Bruce Rauner and feel it is again time to provide our readers and our fearless leader the inside scoop. Here is the safe link to Governor Rauner’s latest plea for WC reform
I feel Governor Rauner is an amazing scholar, business-person and now government executive. I consider our nutty State government very lucky to have him as a leader. I do feel his priorities as Governor need careful retooling, particularly in his view of the problems facing our state. I ask our readers for your thoughts—what are the biggest challenges facing Illinois government? In my view, the number one problem is skyrocketing IL state debt that is now $163B. The second biggest problem is income and corporate taxes that are going up or need to go up to pay for budget deficits and the skyrocketing debt. Governor Rauner, you have accurately pointed out the many problems with the awful 2016 state budget proposal of the Democrats in Springfield who haven’t passed a balanced budget in a decade. Our third biggest issue is Illinois has thousands of redundant and overlapping taxing bodies/districts—more than any other in the entire country by almost triple.
When you look at these major economic crises facing Illinois state and local government, the work comp system is like a tiny blip on the radar. We can and should bring the WC costs down a tad but keep the concept in its proper place, please.
Don’t take my word for it—review this link from the Chicago Tribune about the crushing government and economic problems our State faces right now—you may note they don’t mention IL workers’ comp and/or any need to reform it even once!
That said, Governor Rauner, I feel workers’ compensation reform should be about your 10th priority. We agree lower WC costs will help bring in new business and have somewhat more competitive benefits but please don’t toss the baby with the bath water. In a state that is doing about as well as our beloved and bumbling 3-13 Chicago Bears football team, let’s make a couple of WC cost-cuts and go on to the big stuff! Something can and should be done to continue to tweak benefits lower but, please keep reading, good things may come from a couple of careful changes/tweaks that we are certain will “work.”
We feel our proposed work comp “math” below will bring a savings of around 10% to IL business and government. We feel the hard numbers from the KCB&A simple reform plan to save WC benefits but keep them reasonable should save IL business and government about $300 million a year.
Be Careful What You Wish For--You May Not Want Illinois to Become a Cheapskate, Ooops, I mean Cheap-State for WC Benefits!
Governor Rauner, like many of us, has a number of wonderful children. The Illinois widow I reported about last week, Sara Foster had five little kids. In year 2003, her husband was killed in an unquestioned and unfortunate industrial accident at a car manufacturing plant. The widow was supposed to receive about $1,000 a week or about $52,000 a year plus our IL RAF or cost-of-living adjustments. At the time, she was entitled to combined WC death benefits for 20 years which should and did take care of her kids through college.
If Widow Foster was in Indiana when her husband was killed in 2003, their IN WC death rates capped at weekly death benefits that were and remain staggeringly lower than IL. For an IN worker killed today, I believe their death benefits cap at $780 a week or about $40,000 a year. To my knowledge, there is no COLA increase for death benefits in cheap-o Indiana. Sorry, I don’t think that is enough to raise five kids, particularly if you live in an urban area. And worse, the IN WC death benefits end in the middle of the ninth year. That means most minor dependents of IN decedents don’t have money to eat, for decent housing or college after less than ten years. In my view, that means the IN WC system creates impoverished widows and teenage children. I can’t and won’t believe Governor Bruce Rauner understands that might be what you are asking for when seeking uncontrolled IL WC cost-cutting to match us with Indiana.
As another rapid example, I have a son in his mid-20’s who has two small kids. If he suffered a closed head injury and every doctor he saw said he couldn’t work ever again, the “cheap-state” IN WC system provides him, his wife and small children T&P benefits for less than ten years. After that, it is the welfare line. In summary
• Indiana WC is cheap but isn’t the Garden of Eden for reasonable and fair workers’ comp benefits. They have a system that, in my view, doesn’t truly protect injured workers and their families and reasonably provide for serious injuries and workplace deaths.
• A report from the U.S. Department of Labor in October 2016 says: "Working people [seeking WC benefits] are at great risk of falling into poverty," the agency confirmed when reviewing changes in state workers' comp laws.
• They further outline the WC reforms have resulted in "the failure of state workers' compensation systems to provide [injured workers and widows/widowers] with adequate benefits."
• The report further indicates many States across the country have enacted new laws, policies and procedures "which have limited benefits, reduced the likelihood of successful application for workers' compensation benefits, and/or discouraged injured workers from applying for benefits."
Please Also Understand Illinois Work Comp Benefits Dropped Under The Last Administration and Continue to Drop Your Aegis.
Under the prior Governor, Senate President Cullerton took an across-the-board review of workers’ comp costs and supported the 2011 reforms that unquestionably trimmed rising costs. As one prominent Plaintiff/Petitioner lawyer put it, “everyone got a haircut” and IL WC benefits were similarly clipped. We feel Senator Cullerton is an honest and fair man and wants good things for the State where he has raised his children. We hope Senate President Cullerton and other Democratic leaders will compromise on these simple and non-toxic changes to a system that continues to need trimming to be even better for new, existing and potential business.
I also feel Governor Rauner and other WC analysts shouldn’t put too much faith in the ‘every-other-year’ State of Oregon state-by-state study of WC premiums—car insurance premiums for bad drivers don’t drop the first year they stop having accidents! There is certain to be a delay in any stat-rat analysis of insurance premiums. The lower costs for WC benefits in IL will take a couple of years to show on the books and on the Oregon study but if we cut them, the statistics will show it.
In October 2015, Crain’s Chicago Business reported IL WC medical payments fell nearly 15 percent, to an average of $14,513 per claim, during the 12-month period ended Sept. 30, 2013 (measured as of March 31, 2014), down from $17,140 per claim in 2010-11, according to the Workers Compensation Research Institute, which is mostly funded by the insurance industry. Illinois' average WC payments were lower than Indiana's ($18,863), Wisconsin's ($17,787) and Iowa's ($16,051), according to the study, which compares 17 states that handle more than 60 percent of the workers' comp cases nationwide.
Another study by the stat-rats at WCRI in November 2016 confirmed medical payments per claim in Illinois increased annually an average of only 3.1 percent between 2012 and 2014. Before Governor Rauner was in office, Illinois used to have the highest medical payments per workers’ compensation claim of all the states WCRI studied prior to 2011, the year in which Illinois reduced by 30 percent its fee schedule for all medical services. “Medical payments per workers’ compensation claim in Illinois remained higher than the other states we examined but have moved closer to the median study state, and the shift can be attributed in part to the state’s 2011 reforms,” said Ramona Tanabe, WCRI’s executive vice president and counsel.
Medical payments per claim to hospitals, for both outpatient and inpatient care, were similar in Illinois to other study states. WCRI studied medical payments, prices, and utilization in 18 states, including Illinois, looking at claim experience through 2015 on injuries that occurred mainly in 2009 to 2014.
Based on the statistics above, Illinois has already grown more competitive in the medical aspect of WC in relation to our “sister” states.
My View, Governor, Is Re-calibrate Your Focus for WC Reform—Here Are My Best Thoughts!
Whoever told you to fight for these four IL WC reforms didn’t give you the inside scoop. You have four “turnaround” proposals which focus on
2. “Traveling Employee”
3. Evidence Relating to Impairment Ratings
4. Changes to the IL WC Medical Fee Schedule.
I have told my readers before and I will stake a reputation of 37 years of teaching, writing and winning defense claims in the workers’ compensation system in this state, you are completely wasting your time on the first three. First, if you get the “causation” language you seek, nothing will change other than to see hearing officers address the language and still routinely find causation unless the culture of the Commission changes. Second, whoever wrote the proposed changes to the “traveling employee” concept did not appreciate the adverse effect this poorly conceived “reform” may have on business—please, please don’t pass that legislation, as I am sure it will expand the odd and undefinable traveling employee concept. Please just leave well enough alone unless our courts attempt to judicially legislate expansion again. Third, I will address how to bring PPD or permanency values lower later in this KCB&A Update—you don’t need to worry about evidence considered in reaching lower impairment ratings or permanency. Fuggeddaboutit!
If you change the IL WC Medical Fee Schedule as proposed in your reforms above, those are “hard changes” and like the 2011 Amendments, they should “work” and save WC costs. I vote you or your team discuss the changes in a confab with Dr. David Fletcher or the IL WC Medical Fee Schedule Advisory Board and continue to fight for what is best for our state and its WC system.
So What Else Should Our Fearless Leader “Reform” To Continue To Reasonably Bring Down IL WC Costs?
Workers’ comp benefits are three main things—medical benefits, lost time or TTD benefits and permanency/impairment. Illinois’ business and local government are estimated to pay about $3B a year in such benefits. If you cut them by about 10%, you are saving $300M.
1. As I outline above, medical costs are dropping and may continue to drop. Other than your one reform above, we can all keep watching to insure progress continues.
2. On the issue of lost time or TTD benefits, consider cutting the TTD rate by about 10% or from 66-2/3% to 60% of the average weekly wage—that is a fight worth winning because if you can put that into place, I assure you no one can mess with the legislation, savings would be immediate and the changes won’t be that painful for injured workers who may need more incentive to go back to work due to lower compensation when off.
3. On the third main benefit—permanency or PPD--Governor Rauner, you don’t control our General Assembly but you DO control administrative jobs at government agencies. In my view, you appear to have forgotten how powerful a position that can be. If you actually want IL WC permanency or PPD costs to go down about 10% in the next year:
· I recommend you or your people personally meet with IWCC Chairman Joann Fratianni-Atsaves along with the other nine members of the IL Workers’ Compensation Commission, the 30 or so IL WC Arbitrators and the IL WC Advisory Boards in a major convocation. All of those folks report directly to you via an Illinois law passed in 2011 by Speaker Madigan.
· I would recommend you or your people explain/discuss your concerns about cutting IL WC costs carefully with these administrators. Ask the attendees to take notes to convince you they are listening.
· I recommend you or you people press for a return to the pre-2005 changes and scale back the PPD schedule by about 7-7.5%. Petitioner’s and their attorneys survived for decades before 2005 and will do just fine with the pre-2005 PPD schedule. For one quick example, prior to 2005, a leg was “worth” 200 weeks of compensation. When the liberals in the Blago administration got in, they raised the 200 weeks by 7.5% to 215 weeks—let’s go back to 200 weeks!
· I would recommend you or your people let the IWCC administrators know he will be watching and will carefully consider reappointing the administrators who heed the call. I would recommend you quietly tell the administrators who don’t heed the call, they may want to polish up their resumes.
· Consider creating an IL WC “complaint box” for Illinois business and government to send what they feel are their worst arbitration and IWCC decisions to—have one of your top folks take a look at what the administrators are doing and report back so you know what is happening at this agency.
Going beyond the issues of medical, lost time and permanency, Gov. Rauner, you and your team should ask for and then meet with new IL Supreme Court Chief Justice Lloyd Karmeier along with any other interested justices. Try to invite IL Chamber President Todd Maisch and his WC guru Jay Dee Shattuck to the confab. I would recommend you or your people discuss the makeup of the five-member IL WC Division of the Appellate Court to see if the Supreme Court’s distinguished members can appoint at least two or maybe three moderate/conservative or “pro-business” justices who will heed the same call and try to cut work comp costs and stop flipping denied claims on “manifest weight” and expanding WC coverage and all the other benefit-increasing actions the current judicial panel keeps doing. We haven’t seen a moderate or conservative justice on the IL WC Div. of the Appellate Court in about a generation and the blame for that lies with our IL Supreme Court.
Then Gov. Rauner, we suggest you take a look at your own IL State workers’ comp program that pays millions upon millions of dollars to state workers who are on TTD and total and permanent disability benefits when they can and should be trained and then brought back to the thousands of sedentary and light jobs in Illinois State government. As stupid as it might sound because most folks don’t understand it, start the fight to pass a law requiring all IL injured workers, including police officers and firefighters who can work at all in any capacity have to be brought back to light and sedentary jobs and can’t be paid TTD or T&P or line-of-duty disability benefits if light/sedentary work is available but refused. The same requirement should be applied to Illinois’ largest city—Chicago. The State and the City of Chicago are two of the biggest employers in Illinois and obvious decades-long mismanagement of your/their WC and disability programs poisons the private sector. Happy to explain further if asked. Please also consider hiring a third party administrator from our state to keep the State’s WC business here!!
In your recent op-ed article in Crain’s Chicago Business, you referred to IL WC and said “We can’t afford to fail.” The defense team at KCB&A agrees with you—so start using the tools at your disposal to attack Illinois workers’ comp costs whenever and wherever you and your team can. We are happy to meet with you and your team at any time and discuss/explain all of this—just let us know when and where.
We appreciate everyone’s thoughts and comments. Please post them on our award-winning blog.
Synopsis: Less Recovery Time Equals Less Settlement Monies Paid to Injured Workers Who Experience Knee Injuries. By Ellen Keefe-Garner, JD, RN, BSN
Editor’s comment: All those involved in U.S. Worker's Compensation claims know that compensation settlements involve payments for lost wages and medical expenses. Knee injuries experienced at work can result in a costly Worker's Compensation claim for the employer and the insurance carrier. Any measure that can reduce the cost of lost wages and medical expenses will help save money for employers and insurance carriers who are paying for these claims.
The knee is the largest joint in a person's body, and it bears the load of the body's weight during movement. Knee pain is one of the most common musculoskeletal complaints that brings people to their doctor for treatment. Such knee pain has a wide variety of specific causes and treatments. Strains and sprains in the knee and in other joints top all lists for one of the most common types of injury in Worker's Compensation cases.
The workplace can give rise to a myriad of knee injuries. Workplace knee injuries can result from numerous movements, including slipping and falling, twisting, crushing, bending, and turning. Knee injuries can culminate in a lengthy and difficult recovery for an employee, resulting in extended lost time at work, numerous knee surgeries, and mountains of cost to the employer and carrier. Anything that can help to shorten the recovery time from such a knee injury will result in savings in a comp case.
In other words, the old adage that time equals money comes to play in Worker's Compensation cases involving knee injuries. In such cases, less time recovering from a knee injury equals a speedier return to work. Thinking along the lines of saving money, a new study published in the American Journal of Sports Medicine brings good news for employers and insurance carriers.
The study in the American Journal of Sports Medicine examined patients who had damaged the various forms of cartilage in their knee. In the knee, there is cartilaginous tissue which acts like a shock absorber during weight bearing and impact. One type of such cartilage is called the meniscus, which acts like a pillow to cushion the knee during weight-bearing activities. Another type of cartilage is called articular cartilage. The articular cartilage covers and protects the ends of the long bones that come together in the knee joint.
Incorrect movement at the knee joint can result in damage to or tearing of the cartilage in the knee. Such movement can also result in the loss of some of the cartilage at the articular joint of the knee, resulting in bone-on-bone grinding in the knee joint. Damage or loss of such cartilage can result in pain and significant problems for an injured worker. Treating doctors often resort to ordering various knee surgeries to fix the damage to the cartilage and to speed recovery for the injured worker. One such surgery involves implanting new cartilage into the knee where it can grow and repair the damaged cartilage.
The study published in the American Journal of Sports Medicine proposed that workers who received a graft of their own knee cartilage during surgery would fare better and recover more quickly if they got back to full weight-bearing activities in six weeks rather than in the traditional eight-week period for recovery. In the six-week group, the injured patients had the potential for getting back to work two weeks faster than the eight-week recovery group. The patients who participated in the study all had experienced damaged cartilage in their knees. All of the patients subsequently underwent a two-step surgery called matrix-induced autologous chondrocyte implantation surgery, or MACI surgery.
During the first step of the MACI Surgery, healthy cartilage was collected from the patient's knee. After it was collected, it was sent to a lab where it was encouraged to grow under special laboratory conditions. After more cartilage was grown in the lab, the second surgery was performed. During the second surgery, the surgeon implanted the now-larger cartilage into the knee where it would ultimately integrate with the surrounding damaged cartilage. In other words, the newly grown cartilage was inserted into the knee to "patch up" the damaged cartilage.
Of course, the MACI patch would initially be very delicate following the implantation surgery. Because it was delicate, the patients were required to rest with no weight-bearing on the knee.
Information found during the study showed that some weight-bearing and movement in the knee area might promote growth of the newly implanted cartilage cells. Emboldened by this finding, the authors of the study proposed that earlier weight-bearing on the knee joint might actually speed recovery. Based on testing performed during the study, it was noted that the group of patients with the accelerated six-week recovery period showed slightly better overall performance on tests of the MACI-repaired knee's function than the patients who recovered for eight weeks.
In other words, the study of the MACI graft patients showed that workers with knee injuries could possibly get back to work after a six-week rather than the usual eight-week recovery period. Of course, this shortened period of recovery would result in a savings of at least two weeks of lost wages in a Worker's Compensation case. Considering that knee injuries can be very expensive compensation cases to settle, any savings of lost wages would financially benefit the employer and the insurance carrier.
This article was researched and written by Ellen Keefe-Garner who is a lawyer and nurse. Ellen provides advice and defense counsel in Michigan and Illinois, as she is a licensed attorney in both states. Ellen is happy to consult and advise you on complex medical and legal issues. She can be reached at email@example.com.
Synopsis: IRS Travel Reimbursement Rates Decreased.
Editor’s comment: IRS has cut the mileage reimbursement rates effective yesterday, January 1, 2017.
For IL Claims Handlers and IME services, the mileage rate for IME’s in IL isn’t outlined in the Rules or IL WC Act. There is an appellate ruling that says we/you need to use the IRS business miles driven number—as you can see below, it is 53.5 cents a mile. To create a legally effective Section 12 exam in Illinois, the mileage expense has to be sent with the notice of the IME.
On December 13, 2016, the Internal Revenue Service released the optional standard mileage rates to use for 2017 in computing the deductible costs of operating an automobile for business, charitable, medical or moving expense purposes. Beginning January 1, 2016, the standard mileage rates for the use of a car (including vans, pickups or panel trucks) will be:
•53.5 cents per mile for business miles driven
•17 cents per mile driven for medical or moving purposes
•14 cents per mile driven in service of charitable organizations
The charitable standard mileage rate is set by law. The standard mileage rates for business, medical and moving purposes are based on an annual study of the fixed and variable costs of operating an automobile. The rate for business miles driven during 2017 decreased a half cent per mile, and the medical and moving expense rates decrease 2 cents per mile from the 2016 rates.
You can check out the revised IRS mileage rates here.