11-16-2015; Important IL WC Appellate Ruling on WC Impairment Ratings; Dancing with the Devil in WC?--Can It Be Worth the Risk? Kevin Boyle and Pankhuri Parti on IN WC Medical Cost Study...

Synopsis: IL WC Appellate Ruling Provides Permanency Benefits Even With a -0- AMA Rating By Following the Plain English Meaning of the IL WC Act.


Editor’s comment: In Continental Tire of the Americas v. IWCC, the only issue raised in this workers' compensation appeal concerned the nature and extent of an injury to the left wrist and hand. Claimant worked as a labor trainer for the employer, Continental Tire of the Americas, LLC, at its manufacturing plant in Mt. Vernon, Illinois. He was involved in an undisputed workplace slip and fall accident. Arbitrator Luskin found Claimant sustained a 5% loss of use of his left hand, equaling $6,474.31. The employer appealed the Arbitrator's decision to the Illinois WC Commission panel that includes Commissioners DeVriendt, Tyrrell and Gore. The Commission affirmed and adopted the Arbitrator's decision. The Circuit Court confirmed the Commission's decision. 


The employer argued Claimant failed to prove he suffered any permanent partial disability as a result of the workplace accident. The parties do not dispute Claimant suffered a workplace accident when he tripped and fell while taking trash to a dumpster, landing on his left hand and arm. Subsequent X-rays revealed a serious left wrist fracture. An orthopedic surgeon who treats hand injuries, Dr. David Brown, examined Claimant, placed his arm in a splint, and restricted him to light duty. After appropriate care, Petitioner returned to work full duty with no restrictions and has not sought any further medical treatment as a result of the fall. Petitioner is now making the same  rate of pay that he did prior to the accident and worked more hours. The week before the arbitration hearing, he worked 57 hours. He testified he continued to experience pain from time to time in his left wrist. He testified when he was required to grab tires at work, he sometimes experienced pain in his left hand. In addition, when he carried something heavy, he can feel pain in his left wrist. 


After reaching maximum medical improvement, he played golf in the plant's golf league, which required him to play nine holes of golf one day per week. His team came in first place out of 16 teams in the league. He also played nine additional holes of golf each week. He testified he sometimes had difficulties with his wrist when playing golf.


Dr. Brown testified his initial examination of the Claimant's left wrist revealed a dorsal triquetral avulsion, which is also called a chip fracture of the triquetral bone in the wrist. He described the chip as being approximately three or four millimeters and located on the back or top of the wrist. For treatment, he recommended a removal splint to rest the wrist and allow the swelling to go down and a home exercise program. Dr. Brown released Claimant to work full duty and opined Claimant should not suffer any residual functional loss or difficulties with his left hand or wrist. He believed there would be some soreness for some time, usually four to six months, but the soreness would go away. He noted that typically there was no long-term negative sequelae from this type of injury.


Dr. Brown prepared a written report containing a disability rating based upon American Medical Association guidelines, which is required by section 8.1b(a) of the Act. Dr. Brown opined in his report there was no permanent impairment in the Claimant's left extremity as a result of the chip fracture. He explained in the report at the time of the last examination, Claimant was doing great functionally. He had full range of motion, no tenderness, and no measurable impairment.


The Appellate Court noted the determination of permanent partial disabilities for workplace accidents occurring after September 1, 2011, is governed by section 8.1b of the Act, which became effective on June 28, 2011. Section 8.1b(a) requires a licensed physician to prepare a permanent partial disability impairment report setting out the level of Claimant's impairment in writing. The report must "include an evaluation of medically defined and professionally appropriate measurements of impairment that include, but are not limited to: loss of range of motion; loss of strength; measured atrophy of tissue mass consistent with the injury and any other measurements that establish the nature and extent of the impairment." Section 8.1b(a) requires the physician to use "[t]he most current edition of the American Medical Association's 'Guides to the Evaluation of Permanent Impairment' *** in determining the level of impairment."


In determining the level of a Claimant's permanent partial disability, section 8.1b(b) directs the Commission to consider: "(i) the reported level of impairment pursuant to subsection (a); (ii) the occupation of the injured employee; (iii) the age of the employee at the time of the injury; (iv) the employee's future earning capacity; and (v) evidence of disability corroborated by the treating medical records." In the present case, the Arbitrator considered each of the factors contained in section 8.1b(b) and made the following findings: 


      Dr. Brown found an impairment rating of 0% of the left wrist; 

      Claimant was employed as a labor trainer for the Respondent and has continued in his usual and customary employment as of the trial date;

      Claimant was 49 years old as of the date of loss; 

      Claimant was released to his regular job by his treating physician and continues to work in that position as before the incident; and

      Claimant described some minor residual symptoms in the wrist.


Despite Dr. Brown's 0% impairment rating, the Arbitrator found Claimant sustained a 5% loss of use of his left hand as a result of the accident. The Arbitrator stated he determined the nature and extent of the Claimant's injury by considering "the totality of the evidence adduced."


In the present appeal, the employer argued, by adopting the Arbitrator's decision, the Commission misinterpreted section 8.1b of the Act. The employer argued, as a matter of law, Claimant's request for permanent partial disability should have been denied because he did not present a physician's report to support a finding of a permanent partial impairment. The employer also argued, alternatively, under the manifest weight of the evidence standard, the Commission failed to give proper weight to Dr. Brown's impairment report, Claimant's extremely limited treatment, and his return to full duty at his prior earning capacity. 


As we expected, the IL Appellate Court WC panel quickly and summarily “knocked out” each of the employer's arguments.


First, the employer asked the Court to interpret section 8.1b under a de novo standard of review and hold Claimant was required under section 8.1b to submit a medical report in support of his disability. This sets up what we call a “battle-of-the-ratings” that happens in other states. The employer complained Claimant did not offer any subsection (a) report that supported permanent impairment; instead, the only report in the record is their report from Dr. Brown, which contained a 0% impairment rating. Therefore, the employer argued the Appellate Court must reverse the Commission's award as a matter of law under Section 8.1b of the Act. The unanimous appellate majority noted the language of section 8.1b(b) required the Commission to consider a report prepared by a physician that includes an opinion concerning the level of the Claimant's impairment. The record in the present case established the Arbitrator and later the Commission considered Dr. Brown's impairment report in determining Claimant's permanent partial disability. They noted the Commission's consideration of this impairment rating report complied with section 8.1b's requirements. 


The IL WC Appellate Court expressly and accurately noted the statutory language does not require Claimant to submit a written physician's report. It only requires the Commission, in determining the level of the Claimant's permanent partial disability, consider a report that complies with subsection (a), regardless of which party submitted it. In addition, the majority notes section 8.1b does not specify the weight the Commission must give to the physician's report. Instead, the language of section 8.1b(b) clear states "[n]o single enumerated factor shall be the sole determinant of disability." Therefore, nothing within the statutory language of section 8.1b requires the Commission to automatically adopt Dr. Brown's reported level of impairment merely because the two parties submitted only one subsection (a) report. To the contrary, the Commission is obligated to weigh all of the factors listed within section 8.1b(b) and make a factual finding with respect to the level of the injured worker's permanent partial disability with no single factor being the sole determinant of disability. 


Second, the employer argued, alternatively, the Commission's decision is improper under the manifest weight of the evidence standard. The Court’s majority again disagreed. The decision notes under the manifest weight of the evidence standard, they must give proper deference to the weight the Commission gave to each of the factors listed in section8.1b(b). There was sufficient evidence to support the Commission's findings with respect to each of the factors, and nothing in the record indicates the Commission panel gave improper weight to any one factor. The ruling indicates “[n]othing in the record compels us to second-guess the Commission.”


We want to add a couple of thoughts—one, we always compare what happened to Claimant as it might compare to a non-employee visitor to the same tire-making plant who fell and suffered the same injury and sued in Circuit Court for premises liability. If you or I suffered the same injury, we could see a jury finding liability and awarding $25,000 or more in damages. In contrast, this Claimant received only $6,474.31. It is tough to imagine the “value” of a rapid and fair workers’ comp award being that low but it is hard to get one’s head around the more intense idea an undisputed and seriously fractured wrist should be zero in a workers’ comp setting.


We also want our readers to note the ruling appealed from for 5% LOU hand for a fractured wrist is a dramatically lower value than would have been issued by this administrative body just ten years ago. In 2005, the traditional value for a broken wrist would have been reserved from 15-25% LOU hand. Lots of Arbitrators under former-Governor-Blago-Now-In-Jail would have awarded 20% LOU hand or about $26,000! Illinois WC isn’t perfect but values continue to inexorably drop.


Please also note our current Governor Bruce Rauner is trying to again change the IL WC Act and a confab is set to discuss these proposed reforms with Speaker Madigan and Senate President Cullerton. The proposed WC reforms include a proposed change to consideration of impairment ratings but we are certain that reform, as drafted, wouldn’t change this outcome at all. We also don’t recommend IL WC move to a “battle of ratings” as it appears this employer wants—it won’t be hard for the Plaintiff-Petitioner bar to do so and litigation expense on both sides is certain to rise. We again suggest our brilliant Governor let the quiet WC reforms already in place take effect and move on to bigger things like fake government pensions, bringing state workers back to light duty and cutting the size of our bloated State government.


Finally, please note this employer probably spent $10,000-20,000-30,000 in litigation costs and expenses to fight these odd issues through four levels of hearings/appeals. Moving forward, our respectful advice would be to carefully read the IL WC Act as written and assume the Arbitrator, Commission and reviewing courts will enforce it as the General Assembly enacted it. While we have seen odd rulings where the Commission and reviewing courts “bend” the law and rules, it doesn’t happen for the WC defense side very often.


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




Synopsis: The Dumbest Thing a U.S. Risk Manager Can Do In Workers’ Comp—Dancing with the Devil by “Paying Out of Pocket” for WC Losses.


Editor’s comment: We had an inquiry from a reader about a company/risk manager that knew they had a work-related accident with a serious injury but didn’t report it to their WC insurance carrier. To maybe save future insurance premium dollars and keep their “mod rate” low, they were paying medical bills and lost time out of their own bank account. As you can bet, the claim got bigger and bigger and it appeared they weren’t going to care any more about their future insurance premiums, they started to care about their current cash flow. They reported the claim very late and asked the carrier to reimburse the WC dollars paid to date and pick up the claim thereafter.


If you aren’t sure, this is the WC equivalent of “dancing with the devil.” In short, you are taking a giant risk to maybe save a few bucks in the near term. Why is it an enormous risk to pay a couple of bucks and avoid your insurance carrier for a work-related injury? Late reporting of injuries drives up costs. Workers are less likely to get proper care outside of the workers' comp system if the claim goes unreported. Prompt accident investigation and early treatment of injuries is often the key to successful claim handling. Late-reported injuries also tend to involve more costly litigation, as the insurance carrier and injured worker debate the necessity of medical care and time off from work.


Some state laws sanction employers who do not report compensable injuries to their insurance carriers. In some cases, employers wish to avoid paperwork and costs associated with a workers' comp injury and simply tell the injured worker to seek medical treatment, for which the employer will pay out of pocket. To avoid this practice, most states set a short deadline for filing a first report by an employer to the carrier; in Minnesota, the deadline is 14 days, while in South Dakota it's 20 days and in Iowa just 11 days. If the deadline passes without a report, state’s WC law may assess fines against the employer. This action can also incur inquiry, investigation and issues with your the insurance carrier, including denial of defense or cancellation of the workers' compensation policy.


In the Illinois workers’ compensation system, the risks of late reporting and ending up uninsured for a WC injury are dramatic. First, you can face both the administrative workers’ comp claim at the WC Commission, you can also be simultaneously sued in Circuit Court as a lead defendant. If you are sued in Circuit Court, any money you pay to your worker as a result of that litigation is not a credit against the WC claim. In short, you can owe double-benefits to your worker.


You may think “well, that can’t happen, because I have WC insurance, right?” Again, you are driving down a very scary road because you only have WC insurance if you timely report your WC claims to the carrier. At some unstated but important point, your WC insurance carrier has a valid basis to deny your WC coverage. There is a mountain of case law on denial of insurance coverage for late reported insurance claims. Please also remember you may be fighting a WC claim at the IWCC, a Circuit Court claim brought by your worker and an insurance coverage fight with your carrier. All of these sources of litigation can easily be avoided by simply following the rules.


In a late reported work comp claim, some WC insurance carriers may accept and start to pay appropriate benefits beginning when they learn of the WC claim and some carriers will deny WC insurance coverage entirely. The insurance carrier will want to be able to demonstrate what is called “late-notice-prejudice” and not simply late notice.


In a late-reported WC claim, for an insurance carrier to demonstrate “late-notice-prejudice” should be relatively easy. Some of the factors an insurance carrier isn’t able to do in a late-reported claim are:


ü  If prompt reporting had occurred, their claim adjuster could have insured key evidence was preserved;

ü  Witnesses could have been interviewed in completing a timely investigation of the loss to determine compensability and to determine an appropriate plan of action for resolving the claim.

ü  Prompt reporting allows the detection of “red flag indicators” for fraud and determines whether a work comp case should be referred for surveillance or if there is an opportunity to pursue subrogation against a negligent third party.

ü  Nurse case management could be used to monitor and manage all medical decisions;

ü  Medical treatment could be moved to a WC PPP or in specialized occupational medical clinics familiar with treating workers’ compensation injuries with a focus on facilitating an early return to work to promote quicker healing.

ü  Legal counsel could have been retained to set a litigation plan and validate evidence;

ü  IME’s and utilization review could be used to control medical costs.


Veteran WC readers will also remember the McMahan v. IWCC ruling from year 2000. In this claim, the employer didn’t timely report an undisputed injury. After late reporting, the carrier and employer got into a legal dispute over coverage and neither one of them paid the work-related medical bills. The claim went all the way to the Illinois Supreme Court who judicially changed longstanding and well-settled Illinois law to start allowing penalty petitions on unpaid medical bills.


Either way, our strong recommendation to all of our readers—it isn’t worth it, report your claims to your carrier as soon as you are sure you are dealing with a work injury. If you need advice relating to these issues, please contact us to discuss. 


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




Synopsis: Surprise--Indiana WC Medical Payments Per Worker’s Compensation Claim Are Higher Than 17 States, WCRI Study Says. Analysis by Kevin Boyle, J.D. and Pankhuri Parti, J.D..


Editor’s comment: Indiana is often cited as one of the states with the lowest worker’s compensation costs for their businesses. Indiana politicians often make headlines after landing out of state companies that move to Indiana for this benefit. However, Indiana WC might not really be the lowest when you look at the highest cost in any work comp claim—medical care.


A national study indicates medical payments are actually higher in Indiana and rising faster than in most states examined by a recent study from the Workers Compensation Research Institute (WCRI). Their report, "CompScope™ Medical Benchmarks for Indiana, 16th Edition, covers 2008 to 2013, before the introduction of a hospital fee schedule enacted under Indiana’s House Enrolled Act (HEA) 1320, which went into effective on July 1, 2014. 


“Before HEA 1320, Indiana had higher prices for medical care than most states, and prices were rising faster, situations our studies have found among states with no price regulation,” said Ramona Tanabe, executive vice president and counsel for WCRI. “In Indiana, utilization of medical care was somewhat lower, which tended to offset the higher prices paid.”


Information in the current study serves as a baseline for Indiana, to compare with experience after the adoption of the hospital fee schedule.  The other states examined in the study were: Arkansas, California, Florida, Georgia, Illinois, Iowa, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin.


 Surprisingly, from those states studied, every other state in our law practice, Illinois, Michigan, Iowa and Wisconsin, has better metrics than Indiana.


The following are among the study’s findings:


·         Medical payments per claim with more than seven days of lost time rose 6 percent per year on average from 2008 to 2013 in Indiana, a faster rate than in most of the 17 states WCRI studied.

·         The percentage of medical payments for care within networks increased since 2010, which may have had a dampening effect on price increases. States that lack fee schedules tend to use medical networks frequently to help control medical costs through claims management and negotiated payment discounts. 


WCRI studied medical payments, prices and utilization in 17 states, including Indiana, looking at claim experience through 2014 on injuries that occurred in 2013 and earlier. WCRI’s CompScope™ Medical Benchmark studies compare metrics of medical costs and care from state to state and across time.


This article was researched and written by Kevin Boyle, J.D. and Pankhuri Parti, J.D. who are our top KCB&A Indiana legal specialists. Please do not hesitate to email them at kboyle@keefe-law.com or pparti@keefe-law.com.




Synopsis: We are happy to announce the appointment of former IWCC Arbitrator Ketki Shroff Steffen to the Circuit Court bench.


Editor’s comment: She worked hard but wasn’t at the IWCC long and already had a number of years’ experience as a judge. We extend kudos to her and wish her well.