1-7-13; DOI "Offshoring" Prohibition for UR/TPAs Won't Affect IL WC; Cook County is a Model for IL Gov't WC Programs; Appellate Court "Dents" An IL Employer For More WC Care and much more

Synopsis: The IL Dep’t of Insurance Issued Confusing and Unprecedented Memo Threatened to End Out-of-State UR and TPA’s;Then…


Editor’s comment: You have to love this nutty State. A source sent us a December 20, 2012 edict issued by Andrew Boron, Director of the IL Department of Insurance. It appears to indicate you can’t conduct utilization review or UR or run a third party administrator or TPA outside our state boundaries. That would be a seminal change in the IL WC system. When we received it, we started our research and also sent it to a number of confidential contacts for their thoughts.


From what we could tell in a simple reading, the Director of the IL Department of Insurance was suddenly requiring all TPA’s and UR providers to move their offices/operations into Illinois or be barred from doing business here. This unusual Memo can be reviewed on the IWCC website’s News section:


Dept of Insurance issues UR memo

The Department of Insurance has issued a memo on utilization review services. To read it, go to http://www.iwcc.il.gov/CB2012-12.pdf


To clarify, the memo speaks to both UR and TPA services and their licensure. We did diligent research and reviewed the statutes listed in the memo. As veteran defense lawyers, we don’t agree at all with Director Boron’s legal position on what the Managed Care Reform and Patient Rights Act says and how the IL DOI now appears to want to enforce it. That said, for a number of reasons, we don’t want UR and TPA’s to be “offshored” or situated in foreign countries. On the opposite side of the same debate, we don’t think of UR’s or TPA’s in Indiana, Tennessee or California to be “offshored” work. One also has to wonder about what the IL DOI will do if you have an Illinois office with UR reviewers or claims adjusters “remoting in” from across the U.S.


We then sent an email inquiry to IL DOI Director Boron and asked for the specific language in the Managed Care Reform and Patient Rights Act to which he referred. We are confident our various sources/contacts also sent similar inquiries. At the time you read this article, we assure our readers he hasn’t officially replied directly to our inquiry. The whole thing was then reported to the entire country inwww.workcompcentral.com and their intrepid Central Bureau Chief, Bill Kidd. He quoted your editor on our thoughts and he also quoted one of the top Plaintiff/Petitioner attorneys in IL WC, David Menchetti who indicated he felt UR providers should practice in the state where they are performing reviews. Mr. Menchetti was quoted as comparing UR and medicine in Indiana to India—with respect to this solid lawyer and advocate, we are fairly sure there may be some distinct differences between the practice of medicine in those disparate and distant venues.


We later got a “semi-official” response from the IL DOI sent to one of our contacts. The response is from an analyst with the IL DOI—we don’t have her permission to use her name so we aren’t going to publish it. To the extent her reply is from a state official in response to an official inquiry from whatever source, here is what it says (in pertinent part):


After receiving several calls and emails from your contracted companies this morning I felt it would be beneficial for me to intervene and attempt to clarify the intent of the company bulletin.  At this time, the above referenced bulletin does not include worker’s compensation or independent review organizations registered with this Department. All URO’s providing health utilization reviews will be required to have an Illinois office and hold contracts with Illinois licensed physician reviewers. Going forward all companies registered to perform UR (health) will have at a minimum of 1 year to comply with this bulletin. Our staff is currently working on a Q&A reference page to address all of the questions/concerns we have received.


We have no idea why or how this distinction can or should be made by our state administrators. We point out it is almost impossible to tell when medical care is going to be “workers’ comp” versus non-work-related healthcare; that status may change or morph on a minute-by-minute basis.


From the perspective of the workers’ comp industry, we assume from the official response above, the IL Dep’t of Insurance isn’t coming after you for either out-of-state WC UR or TPA services now or in the future. To our readers in the healthcare industry apart from workers’ comp, this memo will clearly affect your operations. If would appear you have a decision to make—if the DOI is going to require an Illinois office/presence, you can add one, if you don’t have one. If you don’t have one and don’t want to get one, you may have to sue the Department to block enforcement of this concept. Again, it is our strong perspective they don’t have a strong legal basis for what they are doing.


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




Synopsis: Cook County’s WC Cost Containment Program Success – A Shining Example of Good Government That Should Be A Paradigm for Others.


Editor’s comment: As WC healthcare costs continue to rise employers in both the private and public sector are looking for ways to reduce workers’ compensation costs. The second largest county in the nation, Cook County Government is no different.


In 2008, the Cook County Risk Management Dep’t in collaboration with a leading provider of integrated managed care GENEX Services Inc. developed and implemented a customized cost containment program. This was an ambitious endeavor which has become a comprehensive program that has expanded in phases over the past 5 years. Their medical cost containment program includes


v  Medical Bill Review (MBR)

v  Preferred Provider Organizations (PPO)

v  Case Management

v  Medical Diagnostic Testing and

v  Utilization Review (UR).


These initiatives continue to yield to impressive results for Cook County. Combined savings from program inception in August 2008 through fiscal year 2012 is over $47 million. Savings in 2012 alone reached a staggering $17 million. Medical Bill Review is the largest contributor with over $30 million in savings with $3.8 million realized from PPO discounts. The Return on Investment by this government body continues to grow year over year. As predicted, 2012 delivered an impressive ROI of $52.07 to 1, up from the 2008 ROI of $10.76 to 1.


The biggest surprise in savings was Utilization Review or UR. In 2005, the Illinois legislature passed Amendments to the IL WC Act which brought UR to our state for the first time. UR legislation was not widely accepted and often criticized in some quarters. The IWCC slowly and surely has accepted the UR claims tool to the point it has become commonplace. As we told our readers when it started in 2005-6, if you use it in non-litigated WC claims, you can’t miss on savings while also insuring your claimants receive quality care.


As IL employers in the public and private sector began to use this effective claim tool it became more understood, accepted and respected. Cook County has realized over $8 million in saving since implementing UR in 2008. The UR program was expanded in phases as the success began to impact costs and influence treatment patterns. By using the IL UR Guidelines the County of Cook has reduced unnecessary and excessive Physical Therapy by 26,000 visits. The more recent 2011 Illinois Work Comp reform strengthens the UR provisions giving additional consideration and credibility to UR determinations. The new provisions offer support for the program and contributed to increased medical cost savings opportunities.


Since 2008 Cook County’s workers compensation spend has averaged $20M and their team manages about a thousand claims a year. They also contribute their success to an increased effort on early intervention, improving overall communication, and a focus on Return to Work.


From their success, we urge our readers to get moving on the facets that have worked so well for this large organization. Their WC program successes are easy to quantify. If you need consultation and assistance on implementing UR, Medical Bill Review, PPO’s (with PPP’s to follow later this year), Nurse Case Management and Medical Diagnostic Testing, please send a reply.




Synopsis: “Dent” Minimus, Non Curat Lex?? Is There No Imperfection So Tiny In IL WC That Our Reviewing Courts Won’t Demand Illinois Employers Fork Over Even More Money in WC Benefits?


Editor’s comment: Again, we don’t feel you can make this up, folks. In what we consider an astounding IL WC ruling in Dye v. IWCC, No. 3-11-0907WC, December 31, 2012, a divided 4-1 Appellate majority considered a claim for an infinitesimal “dent” on the side of an injured worker’s forehead. This microscopic “dent” was described by a physician as being one centimeter high and two centimeters wide—if you aren’t sure how metric measures translate, those measurements indicate the “dent” was .39 of an inch high by .78 of an inch wide. We consider that eenzy-teenzy facial imperfection, as described, to be a miniature issue to deal with; unworthy of appellate concern. Our headline above is a play on the Latin saying de minimus non curat lex which means little things can’t or shouldn’t be “cured” in law.


Claimant was asking for prospective medical care to refine the tiny dent into something less than a dimple. She was also asking for penalties and fees against her employer for their refusal to voluntarily offer additional medical care to render her “dentless.” The claim for penalties/fees was denied from the first request to present; the endless fight over medical care endured.


From our review of the various arbitration, review, circuit and appellate court decisions, it appears the employer paid for a hospital visit, a CT scan and two different visits to family doctors. After hearing the case, the Arbitrator found claimant already saw enough doctors under Section 8(a-3) of the IL WC Act. The Commission didn’t follow that view, as the two doctors legally provided to an injured worker under Section 8(a-3) were in the same clinic. However, the Commission didn’t award prospective “dent repair” as there wasn’t evidence of an observable disfigurement.


Our Appellate Court majority would have none of it. They reversed under the “manifest weight of the evidence” standard. As we have advised our readers on numerous occasions, we feel the “manifest weight” standard exists only to insure claimants receive benefits because it is almost never employed by our reviewing courts to deny benefits. If you carefully read their ruling, we have no true idea why the appellate majority didn’t feel either the Arbitrator or Commission didn’t fully and carefully consider the facts before them and rule this miniscule facial blemish didn’t need additional expensive medical attention. We also point out innumerable appellate rulings join to summarily find resolution of workers’ comp medical issues are within the sound province of the IWCC. We also read with chagrin the dissent by Justice Turner who pointed out the record before the Appellate Court didn’t have any photographic or other competent evidence of visible disfigurement.


Finally, we point out the relative madness of a claimant and her attorney taking a case for a “bumps and bruises” injury from January 2007 for a blemish the size of this capital letter O through four different levels of litigation to now have it remanded back to the IWCC for further findings. We have to wonder if the six years that have passed and the normal aging process have resulted in the complete disappearance of this tiny blemish since its “born-on” date. One has to wonder what the Commission will do on remand if the dimple has completely disappeared!


The ruling is on the web at: http://www.state.il.us/court/Opinions/WorkersComp/2012/3110907WC.pdf. We appreciate your thoughts and comments.