5-12-2011; Beware the Mulligan--the stakes are going up on claims adjusters “holding on” to litigated Illinois files. If you are following that practice, be sure your E&O coverage is paid in full...

If you haven’t read our KC&A Update from two weeks ago on Mulligan v. IWCC, try reading this one. In that decision, the main dispute was the disclosure requirement in Section 12 of our WC Act. If you aren’t aware of the requirement, when either party gets a Section 12 medical evaluation of a claimant, they have to disclose it 48 hours prior to the “hearing” of the claim or it is potentially inadmissible. In Mulligan, the defense attorney sought to present two physicians as experts. The first was an IME doctor. Although proofs were left open after the first hearing, the defense attorney requested the right to depose his expert and the Arbitrator conducted a hearing and granted the request. The deposition was then conducted.

The second expert for Respondent was retained after the first hearing started. This second expert simply reviewed records and provided a peer-to-peer medical opinion.

In their ruling our Appellate Court, Workers’ Compensation Division looked at Section 12 which clearly relates to independent medical examinations or what are called by many veteran WC practitioners “Section 12 examinations” and expressly found the “48-hour rule” for disclosure also applies to medical record reviews by an expert. We don’t agree with that new and unprecedented ruling but whether you like it or not, peer-to-peer medical record reviews now have to be conducted and disclosed within 48 hours in advance of the first hearing of a claim or this ruling precludes their admission as evidence. This may be applied to UR, life care plans, discharge evaluations and all expert medical evidence of any nature.

The Appellate Court majority’s latest finding on this issue further outlines the start of any arbitration “hearing” cuts off the ability of either party to offer further medical evidence even if there is no dispute between the parties “proofs remain open” at the end of any given arbitration hearing. Based upon the fact the Mulligan second expert was retained after the first hearing, the Appellate Court majority struck his opinions from the record. We assert there is nothing in this decision to indicate claimant’s counsel was not fully apprised of his report and didn’t have a full and fair opportunity to cross-examine this witness in front of the Arbitrator to his heart’s content. It made no difference to our reviewing court.

What does this mean to day-to-day WC claims handling? In our view, many IL WC adjusters and some TPA’s play a “brinkmanship” game of holding onto litigated files even when there are trouble signs. Our firm gets lots of assignments on a last-minute basis and we like to advise clients we are similar to firefighters, send us a file anywhere in Illinois at any time and we will cover your interests. The problem with that perspective is the stakes are now incredibly higher—if you have a claim with either a trivial or complex medical dispute and hold a file to the last minute, we may not be able to get an examination or even a record review to defend you and/or your account. If we receive the file within 48 hours of the hearing, we are certain to be blocked.

What if claimant counsel agrees to allow you to hold the file from defense and get an exam or record review, as you see fit? We just got a file in last week that a very relaxed claimant attorney was handling for some time. The first attorney sent it to a much more aggressive attorney who wants to try it this week and won’t agree to a continuance for any purpose. If we weren’t already rocking and rolling to get needed medical evidence to defend the claim, we assure you the new claimant attorney might be successful in blocking our medical defenses. Effective with the issuance of Mulligan, if a hearing is started, defense medical evidence is blocked.

We are telling everyone who will listen, don’t “trust” claimant attorneys under this new rule for any number of reasons. We aren’t saying claimant attorneys would lie or mislead you; we are simply asserting things in this industry constantly change and you are taking a major risk not to do the ground work to have needed medical evidence to protect yourself and your account. Claimant attorneys are ethically bound to do what is in their clients’ best interest and that interest may not align with protecting adjusters.

Similarly, a claim which is the subject of an ex parte hearing, in which the adjuster doesn’t send it out until after a hearing has already started, should also fall under the aegis of the Mulligan ruling. Even if the ex parte hearing was continued, the late-selected defense attorney may be forced to “defend” the claim without any medical evidence. The new “block” on medical evidence announced in the Mulligan rule might result in six or seven figure losses and clear E&O exposure for the Illinois claims handler or your employer. While we don’t agree with it, we assure you it is now the law in this state and we are all going to have to adjust.

We remind our readers motions for hearing only require 15 days advance notice for a hearing to be set and begin. Cases 2-1/2 years old and older are set for hearing without further notice. If you are managing older claims, be absolutely certain you have appropriate defense medical evidence in the file in case a hearing is set.