5-31-2011; Workers’ Comp Reform Update—“Not so fast, not so fast; go away and come back tomorrow”… “Oh, but I want to go home NOW!”

We were advised a deal in IL WC reform was struck last Thursday, May 26, 2011. Lots of claimant lawyers were running around Springfield with their guts, brains and checkbooks and were able to find and support a significant and multi-million-dollar WC reform initially felt to be sufficient to make the business community happy. Everyone was told the deal was done and the stars were aligned and it was all going to happen. The defense lawyers at KC&A were all high-fiving and assuming we were safe to go drinking but not driving for the Memorial Day weekend. Oooops!


The main cost-cutting provisions were in workers’ comp-related healthcare issues. For our readers, law students and others, across this globe, workers’ comp is three things, medical payments, compensation for lost time and “the settlement.” The number one cost in workers’ comp across the globe is medical reimbursements. Every risk manager we talk to about Illinois WC routinely and regularly tells us Illinois’ WC system is sky-high in medical costs on both per-service expense and duration of care—we aren’t a little bit higher, we are staggeringly expensive. Nationally-recognized medical experts like Maddy Bowling confirmed our 2005 Illinois WC Medical Fee Schedule made doctors and hospitals raise their rates so the “ceiling” became the “floor.” We were advised by WCRI stat-master Richard Victor and others that Illinois has a higher level of WC medical reimbursements than any state in the United States by a wide margin—dramatic cuts would bring us lower but still in the top (or bottom) ten.


From our perspective, claimant lawyers, the State Chamber, the IMA, Retail Merchants and legislators weren’t warm and loving but had figured out a plan and were poised to make WC reforms consisting primarily of cutting medical reimbursements. Last Thursday, we were advised both sides hit a workable legislative deal. One of our competitors actually sent out an email “blog” or news blast confirming their view of what they thought was the coming-to-us-soon legislative deal with only one obvious typo. Our troops immediately undertook to provide an in-depth analysis of the bill in anticipation of writing a treatise and presenting a webinar for you on the 2011 Amendments to the Illinois Workers’ Compensation Act. However, it appears it was all in haste and turns out it for now, it was waste.


House Republicans kiboshed the deal. Illinois House Republicans made no attempt to even try and hide their motives for voting as a group against the proposed workers' comp reform bill. On a legislator-by-legislator basis, they stepped up to vote on behalf of their benefactors, Illinois doctors and hospitals.


Simply put, there is no question the IL WC reform proposal “nicked” or ran contrary to the perceived interests of the Illinois State Medical Society and Illinois Hospital Ass’n by mandating a 30 percent cut in medical reimbursement rates. Republican after Republican rose during open debate to decry the proposed medical reimbursement cuts.


The “wise-guys” in Springfield will confirm the doctors and hospitals historically have given tons of campaign cash to the House Republicans. In turn, the members of the House GOP party claimed their constituents in the State Medical Society were somehow cut out of the deal-making, as if there were tickets to the party to be purchased online. More important, the mantra was sent out that if House Democrats reduced the medical cuts from the proposed 30% down to the Illinois State Medical Society-approved 20%, the Republicans asserted there would be a deal.

In response to the Republican proposal, the Democrats seem to have tried to call the Republicans' bluff. House Rep. John Bradley appears to have indicated during his closing statements before the floor vote that if the proposed bill died, there would be no more votes and WC reform was over, rover. House Republicans then called Bradley's bluff and voted either "No" or "Present." The next thing you may hear is the “nuclear option” the passage of which is right up there with the chance you may soon be taking a balloon ride back to Kansas with Dorothy and the Wizard. If you aren’t sure, the “nuclear option” means there are no WC medical reimbursements. Pretty sure that concept won’t pass either.


The IL WC reform bill received just 55 votes, five shy of the majority needed for passage. Quite a few Democrats voted against it or abstained. Top Springfield sources say the docs and hospitals have even more "No" or “Present” votes in their pocket should the Democrats try to run the same bill again. As we indicate above, those votes also apply to any potential the “nuclear option” may be dropped like a nuclear warhead in Springfield. If you have any concern that might happen, send a reply and we will confirm the millions and millions that would be marshaled to stop it. Trust us, it simply will not happen and it is confusing to discuss.

The next move is unclear. Business groups listed above which supported the bill were and are loathe to weaken it and undermine all of its Senate backers, but they also desperately want a WC reform bill. Corporate CEO’s and most of our defense clients want our readers to know they are completely disgusted with these events and if you aren’t sure, they are ready, willing and able to move their existing and future operations to saner shores.


From our perspective and the view of many of our clients, we hope they can figure it all out. As we have indicated many times and want Illinois doctors and hospitals to be sure to note—WC reform is going to happen with you or happen to you. If CEO Doug Oberhelman at CAT and other similarly situated folks decide to move across the border, Illinois doctors and hospitals and drug stores may have awesome reimbursement rates, but there won’t be much to “reimburse” in this state because Doug’s troops are going to be in Texas or one of our other competitors.


One good thing about this confusion, perplexity, misdirection and mystification is our top Arbitrators aren’t going to be canned like a bunch of rogue sardines. We truly hate that provision and hope someone with a brain rethinks that section of the WC reform legislation. They are civil servants and deserve to be treated as such.