5-12-2011; Hello from RIMS in Vancouver, BC to our readers—Illinois WC Reform Update from the Left Coast of Canada, eh

If you can’t make it to Vancouver, it is raining any way and the party never seems to end, so here are thoughts, gossip and reliable news information about our native state of Illinois from the RIMS attendees and folks at home.


(1)   Recent media blasts/editorials from across Illinois and statements from elected Illinois state officials about our state WC administrators:


a.     We have noted there are numerous claims our the Illinois WC administrative system is “rife with fraud and abuse.” We consider this mostly public relations efforts of questionable origin to bring more attention to the issue of the need for change. The attorneys at KC&A have over 100 years in combined defense experience—we are completely unaware of widespread fraud, misdeeds or dirty dealings at the IWCC—we don’t know one Arbitrator who took one tag off a pillow!


b.    Please remember all attorneys practicing at the IWCC, including attorneys on both sides, Arbitrators, Commissioners and the Chairman himself are sworn officers of the courts of this state. As part of our continuing licensure, we are required to report fraud or even questionable ethical decisions by ourselves and others. We ask anyone in the media who is aware of any specific instance of workers’ compensation fraud to contact our attorneys and we will immediately report it, as we are required to do. Otherwise, we would ask the media stop such overstatements in a very trying time. We are aware of one attorney who admitted buying “face value” athletic and entertainment tickets for Arbitrators—this has been reported to the Feds and they are investigating. That attorney’s admitted mistakes don’t equate with “widespread fraud.”


(2)   Illinois Arbitrators and Commissioners maintain “cozy relationships” with attorneys, doctors and other vendors involved in Illinois workers’ compensation cases and do not     act in a professional manner.


a.     Our defense attorneys appear before the men and women of the Commission’s hearing and administrative staff every working day of every year. We are not always happy with their rulings but no one is on the “take” and it is silly to make that unfounded claim.


b.    In our experience, Illinois Arbitrators and Commissioners are knowledgeable, professional and honest. An attorney on either side cannot walk into a hearing room in denim jeans and a t-shirt and not get rapidly chased out on a dead run. In our view, their relationships with attorneys, physicians, witnesses, court reporters and other vendors are proper and professional. If anyone finds an Arbitrator or Commissioner not properly dressed and who doesn’t comport themselves professionally at all times, please send an email.


c.     While some defense observers don’t like this ruling or that one, if the Arbitrators or Commissioners are acting less than professional, we want to be told and will take ameliorative action by reporting it to our Chairman. We truly feel this complaint has to be justified or it should stop.


(3)   Some observers feel it is not necessary to show any proof an injury was work-related in order to recover Illinois workers’ comp benefits.


a.     In our view, as defense observers, we have told you we are upset about some aspects of Commission rulings. Our complaints are about the law but not the hearing officers who are enforcing it.


b.    Under existing law, the injured worker bears the burden of proving an occupational injury or disease was caused by some act or phase of the employment. If the worker cannot prove a condition of ill-being was related to a work accident or disease, they are not entitled to benefits. The defense lawyers in our firm get numerous “zeroes” or defense findings and we post many of them on our website. If you want some of them, send a reply and we will forward for your review. While we don’t always agree with the level of requisite proof, the need for proof is there and solid and diligent claims handlers and defense lawyers regularly get solid outcomes for our Illinois clients.


(4)   In speaking with representatives of the various interests involved in our industry, reliable sources have advised Illinois physicians, hospitals, trial attorneys and organized labor have indicated a willingness to potentially accept real and bona fide cost-saving reductions and modifications in medical fees and benefits, as well as increased penalties for workers’ compensation fraud. It is our strongest hope this will happen and we support the following changes. It is your call as to whether they are significant enough but we assure you they may happen:


a.     Illinois WC Medical Fee Schedule Reductions


                                          i.    An immediate ten per cent reduction in reimbursements in the Illinois medical fee schedule.

                                         ii.    This change alone is projected to achieve real savings for Illinois business estimated at $150 million per year.


b.    Out-of-state medical providers will be paid at their state’s fee schedule or the Illinois Medical Fee Schedule, whichever is less.


                                          i.    Current law provides payment to out-of-state providers at the greater of the two schedules, which leads to the anomaly of paying out-of-state physicians higher fees than Illinois providers.


c.     Surgical implants will be included in the Illinois WC Medical Fee Schedule and fixed at twenty percent (20%) over cost.


                                          i.    Current law places no fixed limits on the cost of implants

                                         ii.    This anomaly causes what we feel is widespread abuse in implant pricing.


d.    Prescription drugs and medications will be included in the Illinois WC Medical Fee Schedule, fixed at 25% over the wholesale price, plus a dispensing fee.


                                          i.    Current law places no fixed limits on the cost of prescription medications.

                                         ii.    As the fastest rising cost in medicine, we consider this a tremendous legislative proposal.


e.     Utilization review is going to be supported and provided much more substance codifying an Illinois employer’s right to obtain peer-to-peer utilization review within the geographic locality of treatment, with the peer reviewer’s opinions to be considered by the Commission along with all other evidence, and in the same manner as all other evidence, in determining the reasonableness and necessity of medical bills or treatment.


(5)   Immediate reductions in Illinois WC benefits:


a.     This proposal, if enacted would roll back weekly maximum PPD rates to July 2007 levels.

b.    Currently, the maximum weekly compensation rate for disability to scheduled body parts, the person as a whole and disfigurement is $664.72.

c.     We understand that labor and trial attorneys are willing to accept a rollback to the maximum weekly compensation rate in effect on July 1, 2007, which was $636.15.


(6)   Reduction in Illinois Wage Loss Benefit maximums:


a.     The new proposal would roll back maximum weekly wage loss differential benefits to July 2007 levels

b.    Currently, the maximum weekly compensation rate for wage diminution is $930.39.

c.     We understand Illinois labor and trial attorneys are willing to accept a rollback to the maximum weekly compensation rate in effect on July 1, 2007, which was $861.38.


(7)   Cap on lifetime wage loss differential benefits


a.     Currently, wage differential benefits are payable for the life of Petitioner.

b.    We understand Illinois labor and trial attorneys are willing to accept an amendment capping wage differential benefits at seven years or age 70, whichever is later.


(8)   Reduction in permanency benefits for repetitive trauma claims resulting in carpal tunnel syndrome.


a.     Our sources advise Illinois labor and trial attorneys are willing to accept a cap on the number of weeks recoverable for specific loss of use of a hand due to repetitive trauma carpal tunnel syndrome at 190 weeks of PPD, which was the statutory value for 100% LOU of a hand prior to the 2005 amendments to the Workers’ Compensation Act.

b.    For all other injuries involving specific loss of use of a hand, the current value of the hand at 205 weeks of PPD would continue to apply.

c.     This is an immediate 7% reduction in CTS claims.


(9)   Statutory clarification of the formula for TPD or temporary partial disability.


a.     Currently, temporary partial disability is calculated based upon two-thirds of the difference between the amount a worker would be able to earn in their pre-injury job had they not been injured, and the “net amount” they are currently earning in a post-injury modified job.

b.    Case decisions have interpreted “net amount” as the amount the employee receives after subtracting all payroll deductions, such as insurance, union dues, Christmas funds and so forth.

c.     We understand labor and trial attorneys are willing to accept an amendment defining “net amount” as the employee’s net earnings after taxes, rather than net earnings after all payroll deductions.


(10) Reductions in maximum weekly compensation rates in proportion to the statewide average weekly wage.


a.     Under current law, maximum weekly rates for all forms of compensation – temporary, permanent, total and partial – are periodically increased in proportion to the increase, if any, in the statewide average weekly wage. 

b.    However, when the statewide average weekly wage decreases, as occurred in 2009-10 and may continue to occur, the statute does not specifically provide for a reduction in maximum PPD and TTD rates.

c.     We support legislation requiring in the event of a reduction in the statewide average weekly wage, maximum PPD and TTD rates shall be correspondingly reduced.


(11) Intoxication defense clarified


a.     Our sources indicate Illinois labor and trial attorneys are willing to accept codified standards for intoxication, such as 0.8% blood ethanol for alcohol intoxication and an “impairment” standard for illegal drugs, that would give rise to a rebuttable presumption of intoxication.

b.    We strongly support codification of an intoxication defense that would achieve a fair balance between the rights and obligations of the employer and the employee.


(12) Increased penalties and enforcement of prosecution for workers’ compensation fraud.


a.     All participants in the Illinois workers’ compensation system, business, labor, attorneys and the medical community agree WC fraud should not be tolerated.


b.    We understand all of the major proposals to amend the Workers’ Compensation Act include increased penalties for fraud that are expected to achieve up to $25 million in combined fines and savings.


In sum, these proposed reductions in medical fees and compensation benefits, together with the increased penalties for fraud, are projected by our sources to achieve between $300 million and $425 million in total annual WC savings. We consider any and all efforts at IL WC reform to be a solid idea. We don’t know the source or certainty of those metrics. It is your call as to whether that level of WC reform is enough to get us out of the “worst-rated” position any time soon.


We appreciate your thoughts and comments and will relay them to our many legislative and administrative sources. Please do not hesitate to post them on our award-winning blog at www.keefe-law.com/blog