4-19-2011; The Illinois Legislature Wrestled into a Cloud of Smoke over WC reform and then – !!Poof!! – It Died. What’s Next from the Springfield Thinkers?

Well, it appears our legislators on each side of the aisle fought to a draw on Workers’ Compensation reform. The problem is, Illinois employers still come out the loser. We were advised the Illinois Democrats who run the Senate, House and Governor’s mansion wanted to borrow something like $8.7 billion dollars to get their act together and pay bills that have been owed to their vendors for over two years. One funny one is the story our Illinois State Police don’t shoot straight, as they can’t get bullets for target practice because the bullet company won’t provide bullets without getting paid. We are further told the Democrats need about $1.5 billion more to pay their state worker health care tab and other incidentals—that money is due prior to the end of the fiscal year on June 30, 2011. Some of the money they are borrowing is to pay for the money they are borrowing, as they don’t have any defined source of fresh money to pay off the new debt. In one of the worst recessions in U.S. history, we are less than thrilled to see all these billions in red numbers bouncing around.

We were told one of the facets of the Borrowing-of-Billions required the Democrats who hold majorities in both state houses to reach across the aisle to the nice folks from the Republican party. The men and women from the Republican side countered the request for cooperation with a little tit-for-tat; effectively, the mantra was “we will assist you in getting out of the financial mess you have made if you help us to cut workers’ comp costs for Illinois business.“ Everyone focused on the State of Oregon’s metrics showing Illinois has the 3d most expensive WC system in the United States. To the extent our WC costs are only below the nice folks in Alaska and Montana, we point out those two states combined have about one million people less than the current population of Chicago; in short, Illinois has the highest WC costs for any populous and industrialized state in our union.

The lead WC reform bill for the Republicans was Senate Bill 1349. That bill had a number of major reforms including providing employers with choice of doctor, cutting medical reimbursements, limiting wage loss differential claims to age 67, changing the burden of proof on intoxication/drug use claims and much more.

The most important legislative reform concept in SB 1349 and what became the “poison pill” is an interesting controversy. The Republicans wanted a new “causation” standard to require work be at least 50% of the cause of a deleterious condition or what they called a “major contributing cause.” The touchstone of the problem seen across the state is the “scandal” of the Menard Correctional Center where over $10M in workers’ compensation benefits have been awarded in the last three years for untenable claims involving carpal and cubital tunnel repairs. At present, in a facility of about 500 workers, there are 277 prison guards and admin workers with currently pending and effectively indefensible workers’ compensation claims for similar “repetitive trauma” injuries. Due in part to the wildly lax standard of proof, the State of Illinois itself has 25,000 pending claims, costing Illinois taxpayers an obscene amount of over $130,000,000 and more every year. We assure our readers the State of Illinois pays more for workers’ compensation benefits than most Fortune 100 companies pay on a nationwide basis every year.

The problem we foresee with a legislative “causation” standard is “rock beats paper”--hearing officers and reviewing courts can easily trump just about any legislative reform because all the language is subjective and subject to interpretation. Illinois WC system got along for about ninety years, from the inception of workers’ compensation in this state beginning in about 1909 until about 2002 with a common sense causation standard. Beginning with the election of our last felon-Governor and the domination of the WC Commission by the Illinois Trial Lawyer’s Ass’n, we feel Illinois lost any modicum of common sense to the extent:

·         A truck driver with a severe advanced bone disease who simply stepped out a truck, causing his foot/ankle to spontaneously crumble got full lifetime WC benefits in the Sisbro ruling;

·         A truck driver with a back strain who was almost completely recovered and was forced off his personal motorcycle at high speed gets full lifetime benefits from his employer for the non-work-related fall in the ABF Freight ruling;

·         An office worker with a lifetime of back problems and failed back surgery now gets years of lost time and full lifetime WC benefits from her employer for a “misstep” in the Barrington Orthopedics ruling.

All of these Appellate and Supreme Court rulings demonstrate very, very minimal causation between the permanent condition and the workplace event. All of them are certain to cost Illinois employers millions.

Well, the battle of a “causation” standard which might make sense triggered the defeat of Senate Bill 1349 in a 25-6 vote by our Senate last week. The Democrats basically voted “present” but did not take a stance either way, leaving the Republican WC reform effort to die on the vine. Senate Democrats asserted a “better, more balanced” proposal would be forthcoming after their two week Easter/Passover recess. Yawn. The State Chamber estimated SB 1349 offered over $600 million in annual savings—a savings at that level would, by our math, move Illinois from 3d worst to about 6th—that is how bad our state WC system has become. We wonder if Senate Republicans will now back off support for the Borrowing-of-Billions as we outline above??  Either way, watch this space as things may ramp up again in two weeks after the Easter/Passover recess is over.

On other IL WC reform fronts, we note

A.    To our knowledge, the Governor’s extensive WC reform proposals still haven’t made it into an actual “bill” for consideration by the House or Senate. Like the State of Illinois Budget, it appears he likes to announce stuff for the press but doesn’t get the homework done.

B.    Our biggest hope for WC reform in this state is to have the Governor calmly contact the IWCC and lay down the new law—sniff out and stop WC fraud, limit the scope of the Act to its traditional focus, limit permanency in repetitive trauma claims and start to bring Illinois back into the mainstream. Trust us, the current Chairman and other hearing officers don’t need legislation to meet such goals, they are best positioned to do it quietly and quickly, if they want to. If this starts to happen, we assure you we will report it.

C.    The Illinois House passed a bill which, if passed by the Senate and signed by the Governor would end the WC claim of former State Trooper Matt Mitchell who pled guilty after killing two young girls while driving well over 100mph and texting his girlfriend. Again, this is a “common sense” bill mandating that a claimant injured in the course of employment while committing a crime wouldn’t get benefits. We consider that principle common sense and remember the “good old days” when the claimant bar would police itself and turn down such embarrassing claims. We were stunned to see five different claimant attorneys who were interviewed and quoted in the media as saying the claim had to be compensable, solely because the impossibly dangerous and terrifying actions of this claimant were “in the course of” employ.

D.    The Bradley Bill designed to end the workers’ compensation system in Illinois is inexorably tied up in legislative webbing. We assure our readers this concept is designed solely to confuse and confound casual observers—there is no chance, none, that it might somehow become law. Here are our top ten reasons it will never pass:

ü  IL Doctors/hospitals would immediately and irrevocably lose their dramatically higher WC reimbursements—if this legislation was serious they would fight like cornered wildcats to oppose this bill.

ü  The Illinois WC insurance industry would almost immediately disappear and be swallowed by the GL industry.

ü  Similarly, WC lawyers, hearing officers, brokers, nurse case managers, voc rehab counselors and others would disappear. There is no chance ITLA would ever support this bill. Ever.

ü  Unions would go nuts because their members would have to litigate work injuries claims for years to get a dime—their families would unquestionably suffer and possibly go bankrupt waiting for interrogatories, depositions and all the other fun and sloooow stuff in the common law courts.

ü  In personal injury claims, historically 50% of jury verdicts are zeroes—injured and/or dead workers with severe injuries could win just as easily as they could lose.

ü  Employers have more resources and incentives to fight GL claims—union and employee reps would cry and moan about the expected imbalance.

ü  Plaintiff lawyers charge fees of 33.33-50% on GL claims, causing claimants to potentially get much less, even if they prevail. Right now, attorney’s fees in IL WC claims are 15-20%.

ü  There would be a potential for multiparty claims with varying liability, making some work injury lawsuits wildly complex.

ü  The main reasons for WC are fast and certain benefits—all of that would end.

ü  Employers did not and do not want the explosive potential of punitive damages, class actions, RICO claims and other silliness that happens in the common law courts.

Take our word for it folks, this silly “death-to-workers’-comp” concept will remain part of the wacky Illinois legislative frontier and quietly disappear as fast as it arose. If you have any worry about it, take two aspirin, relax and go on to other things because it won’t happen and isn’t worth the time to debate.

We want our readers to know, if they ever pass an IL WC reform bill, we will do a webinar or three to give you the inside scoop. We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog at www.keefe-law.com/blog.