10-31-2016; Falling from Office Chair Isn't Accident in WC by John Campbell; Shawn Biery/Matt Ignoffo on WC Medicare Development/Enforcement; Digi-Transformation at IWCC Doesn't Cure DWP Problem

Synopsis:  IL Appellate Court, Workers’ Comp Division Rules A Fall From a Standard Office Chair Not Compensable. Thoughts and analysis by John P. Campbell, Jr., J.D.


Editor’s Comment: From the perspective of our clients on the defense side of this IL WC, Claims and Risk industry, we are happy to see reasonable interpretation of facts and denial of benefits where there is truly no increased risk at work which led to the injury. The recent decision in Noonan v. IWCC 152300WC (Oct. 21, 2016) is notable not just for the central ruling and sound legal analysis, but also for the IL Appellate Court’s reprimand to the Commission who, on initial remand, decided to side-step the Circuit Court’s order for reversal.


Claimant Noonan was working in an office setting as a clerk for a trucking company. While working in routine fashion handling everyday paper work, he knocked a pen off his desk. While reaching to retrieve the pen from the floor, his rolling chair slid out from beneath him and he injured his right wrist when he put his hand out to break his fall. Respondent challenged the compensability of this injury. The Arbitrator and Commission on review denied benefits, explaining that Noonan “failed to prove that the simple act of sitting in a rolling chair and reaching for a pen exposed him to an increased risk of injury that was beyond what members of the general public are regularly exposed to.” There were no flaws in the floor or chair to be identified which would have otherwise contributed to the incident.


Upon further appeal, the Circuit Court initially issued a reversal and remand to the Commission with direction to award benefits.  On remand, the Commission more-or-less refused to follow the direction of the Circuit Court and instead affirmed their own prior ruling. No doubt perplexed, Claimant appealed again to the Circuit Court. Then, rather surprisingly, the Circuit Court on its second judicial review actually ruled that their own first Circuit Court ruling was in error and that the original Commission decision was affirmed.


Asyou may have guessed, the IL Appellate Court was apparently not thrilled with any of this.


The Appellate Court made clear that the Commission, or any lower ruling court for that matter, cannot simply ignore direction on remand from a higher court. Ample case-law was cited to explain “where a cause is remanded by a court of review to a lower court with directions to enter a certain order or decree, the latter court has no discretion but to enter the decree as directed.” Moreover, the Circuit Court’s ruling upon the second appeal was criticized for failing to follow the procedural process and failing to address the appeal placed before them.


Rather than address the issues raised upon the second appeal from the Commission, the Circuit Court (on the second review) went on to address its own prior ruling. The Appellate Court explained that the Circuit Court has limited statutory jurisdiction on review to either affirm or set-aside a decision of the Commission. The Circuit Court has no latitude to “take a mulligan” on a prior ruling of its own or to “undo” a prior ruling which was not on appeal.  Of course, the Appellate Court was entirely correct to insist the Commission follow orders on remand. Without such adherence to higher court rulings, we would have no reliance on legal precedent at all and chaos would ensue.


Upon addressing the merits of the case, a majority of the divided IL Appellate Court, WC Division ultimately affirmed the denial of benefits here, finding that the risk of injury at issue was simply not one distinctlyassociated with Claimant’s employment. The Court explained reaching for a pen on the floor was not a required job duty and was not incidental to his assigned job duties. This was deemed a “neutral risk” and the majority ruled such injury would only be compensable if Claimant was “qualitatively or quantitatively exposed to the risk to a greater degree than the general public. Claimant’s risk of falling from a chair while reaching to the floor is one which claimant would be equally exposed to apart from his work with the employer.


We agree with this ruling, to be sure. However, as evidenced by the dissenting opinions in this 3-2 majority ruling, we note the definition of a “neutral risk” at work and what activities are “incidental to employment” can be slippery concepts to grasp on a case-by-case basis. Whether reaching for a pen on the floor as an office clerk is “incidental to employment” can be argued either way, especially by crafty lawyers on either side of the isle. This ruling does demonstrate a more recent trend to deny claims where there is no clearly evident work related risk to the injury. To this extent, we find this to be a favorable ruling for the defense industry and the clients we represent.


Editor’s comment: It is important to consult with John Campbell, your editor or any member of the KCB&A defense team before accepting liability on a questionable WC claim. Such inquiries are free and the response is fast. This important compensability ruling should go into the list of claims where a worker is clearly “in the course of” employment but due to the lack of proof on an increased risk, benefits are denied. It is crucial to try to “lock in the facts” to avoid having them change due to denial.


A few examples:


      Stepping off a typical city curb was denied in the Caterpillar Tractor ruling.

      A worker who fell down in a bathroom but couldn’t attribute her fall to anything at the workplace was denied benefits in First Cash Financial v. IWCC.

      Taking off one’s coat at work doesn’t comprise an accidental injury when a herniated disc occurred in Branch v. Industrial Commission.


There are many more such claims—send an email if you have questions or need research into challenging fact situations. We assure our readers we win such fights at the IWCC with regularity.


We appreciate your thoughts and comments. Please post them on our award-winning blog.



Synopsis: Changes Afoot with Medicare--Recent Startling Decisions May Set Disputed Claims with Potential Medicare Secondary Payment Recovery Issues On Their Collective Heels. Analysis and Reporting by Shawn R. Biery, J.D., MSCC and Matt Ignoffo, J.D., MSCC.


Editor’s comment: The Centers for Medicare and Medicaid Services seem to be stepping up their game for seeking reimbursement in cases where they believe someone else has primary responsibility for medical bills, and some say the agency’s new strategy will be wreaking havoc in workers’ comp. The following are not intended to be in order of importance:



It was recently noted changes are being made to the requirements for CMS to approve zero allocations based upon denial of the workers’ compensation claim. The change in requirements for approval of zero allocations has been touted on many industry websites and blogs—first notice to us came from Sharpline Allocations. The WCRC has indicated CMS will now be requiring these guidelines to be published and the following will be necessary to approve a zero allocation:


1.               A court ruling related to the claim, including but not limited to, issues of compensability. (Obviously, denying compensability since a finding of compensability would lead to liability for payment)


2.               If no court rulings exist for the claim regarding compensability, you will need to provide treatment records that demonstrate no further treatment for the argued related injury


The WCRC release date for this policy is unknown, but it appears these practices are currently being implemented. As any of our clients involved in claims seeking $0 MSA with our assistance, #2 may seem familiar because we have been making attempts at verification of no further treatment in applicable claims since 2009. Our recommendation has been to seek a verification of no further treatment as a best practice in anticipation of CMS becoming more aggressive in any review of prior settlements. It now appears they will be doing so.


Our best practice and recommendation remains that compromise settlements in which nothing is being allocated for future medical should include an attempt to determine an MMI and no further treatment from the MD unless such a release already exists in records prior to settlement. It also remains our position that in fully compromised claims, that settlement language which addresses that Medicare’s future interest be included to confirm the rationale for no allocation for future medical care. In some cases, the change in policy may lead to the need for a full Arbitration of the claim if you cannot determine a written confirmation of no further treatment.



As required by section 202 of The SMART Act, CMS is required to annually review its costs relating to recovering conditional payments as compared to recovery amounts. For the past three (3) years, the liability TPOC threshold has been maintained at settlements of $1000 or less. CMS has announced via alert that the TPOC threshold for liability claims will remain $1000 for the rest of 2016. CMS has also released a TPOC threshold for workers’ compensation settlements of $750 or less, wherein the settlement would not need to be reported and conditional payments would not need to be reimbursed. However, this TPOC reporting threshold only impacts claims wherein the no-fault insurer or workers’ compensation entity does not have ongoing responsibility for medicals (ORM), otherwise the claim would still be reportable under ORM reporting requirements. (IN ESSENCE, IF THERE IS A CHANCE FOR FUTURE MEDICAL, YOU ARE STILL ON THE HOOK). CMS has indicated that both thresholds are only in place through the rest of 2016 however it is unclear that they would not be extended to 2017. From a reporting aspect, the workers’ compensation and no-fault threshold will impact very few claims as most of these claims have ongoing responsibility for medical. However, the more obvious benefit is that no recovery for conditional payments should be pursued on these claims following settlement where no ORM is established.



Under a change that took effect last Oct. 5, CMS is no longer waiting for a settlement of future medical costs to pursue reimbursement in a claim. Instead, the agency is going after payers as soon as someone accepts ongoing responsibility for medical payments. The change is intended to help CMS collect more of the money it is owed because some claims aren’t settled, or there’s a settlement on the indemnity portion but not future medical. This may be an even bigger impact in stateswhich don’t allow settlement of future medical expenses where they may now be facing Medicare reimbursement for hundreds or thousands of cases. From our research, the relatively new contractor who now handles the pre-settlement reimbursement process (known as the Commercial Repayment Center, or CRC) has issued more than 36,000 Conditional Payment Letters (CPLs) and Conditional Payment Notices (CPNs) and CMS is using CRC to improve responsiveness to requests for conditional payment information. Once the CRC starts reviewing the claim, they almost immediately can issue a conditional payment notice that might catch some off-guard so you need to develop a plan for handling the notices in general.


There are several cases which are showing how serious the collection activity has become. In one (Hull v. The Home Depot) as far as we can tell, there was a written ruling on a motion for Summary Judgment on a MSP complaint for double damages.  In essence, a disputed worker’s compensation claim was found compensable and was appealed. Prior to appeal, The Home Depot was made aware of two conditional payment claims: one owed to Medicare and other to a private Medicare plan. The Home Depot dismissed its appeal and when the dismissal was final, the conditional payments were reimbursed within 13 days.  Despite the Home Depot’s reimbursement to both Medicare and the private Medicare plan, The Home Depot was found to be strictly liable for double damages under the MSP PCOA and ordered to pay an additional $42,233.16, which was the amount already paid to Medicare ($6,813.83) and Medicare Advantage ($35,419.33) as a penalty to be paid again due to the lack of “immediate payment” upon receiving the notice letters. This seems to be a major flaw in application of the “demonstrated responsibility” portion of MSP. A settlement, judgment or award is the trigger for responsibility to reimburse and it even effectively states if responsibility by “other means” were involved there is liability to pay. Basically this portion of the law was included so responsibility to pay could be triggered by a statute or by contract—or simply by payment which fits no -fault or worker’s compensation claims which routinely pay out medical benefits without any judicial determination. 


Arguably reimbursement should not be required to be immediate however technically reimbursement must occur in accordance with Medicare policies and procedures which not only apply to Medicare, but also the private Medicare plans. It also appears conditional payment letters were issued and then not acted upon because of the dispute on compensability. The concern obviously is that penalties which will double the cost of any Medicare related conditional payments would have a significant impact on reserves and the bottom line of employers and insurers in an already sometimes burdensome system.


In another case (United States District Court for the Eastern District of Virginia, Richmond Division, opinion on Humana Insurance Co. v. Paris Blank LLP and Keith Marcus) they follow up on yet another case (In re Avandia) finding that based on the Medicare Secondary Payer Act, its private cause of action provision, CMS’ regulations and policy memos, and In re Avandia’s analysis allowing Medicare Advantage Organizations to seek double damages just like government, Humana is allowed to seek reimbursement of any conditional payments it paid regarding treatment related to the settled motor vehicle claim. The court makes it clear that since the plain language of the MSP Act fails to limit the parties against whom suit may be maintained, and CMS has previously promulgated regulations specifically allowing recovery of conditional payments from attorneys, Humana may maintain its suit against the law firm and attorney for recovery of conditional payments it made related to the claim.


Although not binding precedent, the Court found persuasive the Third Circuit's determination that a MAO may pursue recovery pursuant to the private right of action in §1395y(b)(3)(A). “Section 1395y(b)(3)(A)'s plain language establishes a private right of action to recover double damages where a primary plan fails to pay. Absent from the plain language of the statute is any restriction upon who may utilize that private right of action.” The Court further indicates that “even if the Court were to find the language ambiguous, CMS regulations afford MAOs the same rights to recover from a primary plan, entity or individual that the Secretary exercises under the MSP regulations."


Much like US v. Harris in 2009 in which a West Virginia federal district court found plaintiff’s attorney responsible for reimbursement of conditional payments made by Medicare, seven years later, this Virginia federal district court similarly finds that plaintiff’s attorney and law firm are responsible for reimbursing conditional payments made by a Medicare Advantage Plan. This time however because the claim was brought under the MSP’s private cause of action provision, plaintiff’s attorney and law firm are looking at double damages, close to $400,000.


If there are any doubts that reimbursement of conditional payments is a big deal, this case should be a reminder to everyone involved in a settlement, judgment, award, or payment, (whether a Medicare beneficiary, attorney, law firm, insurer, self-insured, or TPA) reimbursement of conditional payments to Medicare or a Medicare Advantage Plan cannot be ignored.


The takeaway—make sure you have all documents from Medicare reviewed immediately by someone with the appropriate background to ensure you don’t miss something and leave yourself open to some future review or impact—and not doing so may double your future exposure.  Shawn Biery and Matt Ignoffo are the resident MSA certification holders at KCBA and available for your questions via email at sbiery@keefe-law.com  or mignoffo@keefe-law.com  or via phone at 312-756-3701 (Shawn) or 312-756-3729 (Matt). They jointly researched and wrote this article and continue to follow MSA & Medicare compliance trends.



Synopsis: Part II of Last Week’s Article--Has One of the United States Slowest WC Systems Gotten Even Slower? New IWCC “Transformation” Will Happen When?


Editor's comment: We were thrilled to read the news flash about the IL Workers' Comp Commission’s plans to update their technology at no cost to IL business taxpayers. Last week, the Illinois Workers’ Compensation Commission announced the launch of its Digital Transformation Project, which will modernize all agency systems, including their outdated paper-based filing system. This improvement is another step in the Rauner Administration’s initiative to cut red tape and modernize technology within IL State government to make it more efficient while deriving more value for taxpayers. The new IWCC e-filing system will redevelop systems that are up to 40 years old, and it will be paid for entirely out of the IWCC settlement fund at no costs to taxpayers.


However, the news also indicated this project must be fully implemented within five years. Digital upgrade benefits will include easy online filing, standardized electronic data submissions, efficient workflows, reduced paper processing and storage, decreased mailing costs, and improved data analytics and metrics. Once completed, the new Illinois Department of Innovation & Technology will maintain the IWCC e-filing system.
While that news above sounds great, as we told our readers last week, we were surprised to hear “real-time” news the IWCC may not have been issuing notices of dismissal or DWP’s because the machine that creates such notices supposedly was broken for an extended time. No one from the IWCC appears willing to officially confirm or deny this report which may be all the more maddening. We have no idea when the transformation to all digital claims handling will rectify this crisis that involves literally thousands of claims.


Our major concern is there is no filing fee to file IWCC claims in this State. Therefore, attorneys and some “pro se” claimants can and do file claims that aren’t strongly supported by the law or facts. When employers receive the claims and report them to their insurance carriers/TPA’s, monies have to be set aside in reserve to insure the claims can be defended and managed, if there is a basis to do so. If the claims are meritless or the claimants and/or attorneys lose interest in prosecuting them, it is crucial to get the claims dismissed and then have the dismissals become final. Only when there is finality to a DWP or dismissal can the reserves be freed up and used for other important reasons.


What is the scope of this issue? Well, the IWCC’s 2015 Annual Report that is online for everyone to see indicates there is just under 50,000 new IL WC claims filed every year. The 2015 Report confirms about 5,100 claims or more than 10% of all IL WC claims are dismissed for want of prosecution at arbitration or before the Commission panel on review.  


That means if IL Business has to put $2,500 in reserve for all those claims, something like $12,750,000 is being tied up in reserves for filed WC claims that are going nowhere. When they are dismissed by the Arbs or Commissioners, it is important for the dismissals to become final to free up reserves.


What Can Your Defense Team Do About This In The Short Term?


Don’t wait for digital transformation! In our respectful view, you shouldn’t have to wait for a notice of DWP that may be delayed or never come, as we recently learned. We recommend you have your defense lawyer draft and file a motion for an order from the Arbitrator or Commissioner to sign and then enter. It is our reasoned legal opinion a signed order of DWP will become final thirty days after entry. At that point, you should be able to safely close the file. As part of the file closing procedure, you can also free up the reserves on that claim and put them to better use.


Finally, as we told you last week, if you are on the defense side of the IL WC matrix, you are paying 100% of the cost of the IWCC. If you care about this sort of issue, please send an email to IWCC Chair Fratianni or the IWCC’s counsel, Ron Rascia and let them know how you feel about it. If you need their contact information, send a reply.



Synopsis: You might note we have gone to a two-tone KCB&A Update!


Editor's comment: We had any number of our readers blocked by spam-blockers last week. One reason was the use of various colors in fonts and the web links. We are trying to get through to you so we are going to only two colors and smaller pictures and better “hyper-linking.”


If you want to review last week’s important Update, send a reply and we will again send it.


Synopsis: The KCB&A Monday law updates are archived on the KCB&A blog!

Editor’s comment: If you are looking for any article previously written in this update, or just want to browse through a host of insightful articles dealing with our Illinois Comp system, stop on over to KCBA Blog and take a look. The blog currently includes archived articles dating back to August 2008.

Synopsis: Top Twelve Free (or almost free) and Truly Handy Claims/Risk Management Stuff from Keefe, Campbell, Biery & Associates to our readers.

Editor’s comment: We do lots of things for this industry that you may not know about. Let us know if you have interest in any of these services.

  1. Send us a lead, any lead—we are always looking for new clients and contacts in Illinois, Indiana, Wisconsin, Michigan or Iowa. If you send a us contact information about a risk manager looking for defense counsel in any of those states, we will send a $50 gift card.
  2. Happy to help you on a 24/7/365 basis--send your claims inquiries and toughest questions to ekeefe@keefe-law.com for 24/7/365 answers to your toughest Illinois claims questions. Give us 24 hours and we will get back to you with reasoned thoughts and suggestions, recommendations on pro se settlements and best practices in handling difficult and complex claims concerns.
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  4. Next, take a look at actual winning results from the top defense firm in Illinois, Wisconsin, Michigan, Indiana or Iowa by going to this link: KCBA Successful Outcomes
  5. Shawn R. Biery does a continuously updated and very handy Illinois Workers Compensation Rate Sheet. It is available to anyone upon request. If you want it, send a reply or email Shawn directly at sbiery@keefe-law.com.
  6. We have a one-page document free to the industry called Keefe, Campbell, Biery & Associates Rules of Thumb that provides a quick reference for adjusters and risk managers with Illinois claims. Again, if you have interest, send a reply.
  7. We have a free presentation on the 2011 Amendments to the Illinois Workers’ Compensation Act. It is also available in a condensed form. If you would like a copy, send a reply.
  8. We also have a free book on all aspects of Illinois Workers’ Compensation Law and Practice. If you are unfamiliar with the Act and Rules and want a resource book, please send a reply.
  9. We provide answers to questions adjusters have about appropriate reserves on your claims, usually within 24 hours. We employ WestLaw© research in rendering our evaluation for your complete file. If you have interest in a legal opinion to support your reserve calculations, email ekeefe@keefe-law.com.
  10. We obtain rapid approval of pro se settlements in Chicago for the low price of $300.00 and outside the Chicagoland area at $400.00. If you have interest in such services, again, email ekeefe@keefe-law.com. We can turn such approvals around in days with cooperation from claimant.
  11. We are happy to provide a free legal audit of up to ten of your worst litigated claims. Our goal is to advise how to best bring such claims to rapid closure within authority. We have had solid outcomes from such reviews. All of our handling is attorney-client privileged. If you have interest in a legal audit, send a reply to ekeefe@keefe-law.com.
  12. We have a strong list of medical, diagnostic, pharmacological, vocational, utilization review, nurse case managers, surveillance, accident reconstruction, ergonomics, safety and other top-notch experts for your consideration to use in Illinois workers compensation, general liability and employment law defense litigation. Such recommendations are free. We update such lists continuously. We can also provide research backing up the credentials of such experts. If you have a need for an expert, send a reply.
  13. We are the only defense firm that has several workers compensation law professors on staff—we have read and analyzed every single IL WC appellate ruling for over three and one-half decades. For any of our readers, if you have a complex (or even a simple) question about any aspect of Illinois workers compensation law and practice, please send a reply and we will advise within 24 hours. If you have interest in attending or auditing the best workers compensation course in Illinois at one of our top law schools, let us know and we will provide details.
  14. Need a calculator for your desk? Send a reply and we are happy to send a free one that works!