2-2-2015; Walker Wants to Whack Wisc WC--Will Rauner Follow?; Can IL Wage Loss Settlements Ever Be "Fair?"; LHWCA Enforces Statutory Notice Req'ment as the States Do and more

Synopsis: Walker Wants to Whack Wisconsin WC--Will Rauner Follow?


Editor’s comment: Workers’ comp watchers across the Midwest U.S. were stunned to see a memo come out of Cheese-land where it appears Governor Scott Walker is trying to break up or “de-form” their quiet and generally reasonable workers’ compensation system. Labor representatives and attorneys say they are concerned about a report Gov. Scott Walker’s two-year budget plan will call for “drastic” changes in Wisconsin’s well-regarded system for compensating injured workers.


Please note the most recent Oregon WC premium rankings puts Wisconsin almost right in the middle of the United States—they are 23d with an index rate of 1.92  and they are 104% of the median of all states. Our Cheese-brothers/sisters were previously 12th in the Oregon 2012 WC premium rate survey so they are tracking precisely where Illinois wants to be in the next two years.


It seems someone in the Wisconsin Worker’s Comp Division leaked an unsigned memo authored by a person with knowledge of the potential changes to the worker’s compensation program states the Walker administration plans to upend the current one-stop-shop for injured workers, employers and insurance companies by dividing responsibilities among various agencies that don’t currently handle or understand workers’ comp law and rules. These are changes the anonymous author claims will “clearly have a negative impact on our stakeholders.”


The memo, dated Jan. 15, was sent to “WC Stakeholders” and is filled with shorthand and acronyms aimed at people knowledgeable about the WI WC system. The Wisconsin State Journal obtained the memo last week, and it was circulated among the media by Sen. Jon Erpenbach, D-Madison, on Monday. If you want the link to the memo, send a reply. The author declined to be identified publicly for fear of being terminated. Among the changes the memo outlines would be allowing companies and injured workers to reach their own settlements.without approval by the WC Division. Currently, all such agreements must be approved by the Division’s ALJ’s or administrative law judges. The same rules apply in IL workers’ compensation—the concept is to insure injured workers get fair settlements within a reasonable range for other similar injuries.


In addition, the memo states ALJ’s and the Division would no longer be available to answer questions from the public, injured workers, employers and insurance companies and instead focus only on rendering decisions in contested cases. This “no-questions-answered” concept wouldn’t be much of a change to Illinois WC practice as our WC administrators rarely answer questions but direct interested parties to attorneys on both sides. We feel this newly proposed Wisconsin approach may lead to more litigation and not less.


We are also advised the Governor wants to end the practice of using certified court stenographers for contested hearings—this practice would change the concept of appeals in reliance on transcripts. We are unsure what other system for recording hearings would replace transcripts and the CSRs who create them.


Another aspect of the plan would reportedly remove the Worker’s Compensation Division from the Wisconsin Department of Workforce Development and split its future duties between two different agencies, the Office of the Commissioner of Insurance and the Department of Administration, according to the memo. As we outline above, neither agency has anything to do with Wisconsin workers’ comp at present so a rocky and confusing transition may take place. Governor Walker is scheduled to unveil this budget proposal tomorrow Feb. 3.


Like IL WC, the cost of administering Wisconsin’s WC program is paid for by worker’s compensation insurers and self-insured employers who remit a yearly fee in proportion to their size. Taxpayers and injured workers do directly not pay for the WC system. For the Wisconsin WC administration, any reorganization would not add or subtract from the 2015-17 Wisconsin budget’s bottom line.


What will it mean to Illinois WC?


It is hard to tell but we are certain our current Governor Bruce Rauner closely watches the actions of Governor Walker in Wisconsin and Governor Daniels in Indiana. We salute him for doing so, as they are close competitors of our state. Of the three states of Illinois, Wisconsin and Indiana, Illinois has been the worst-run under Democratic control for well over a decade and we have major financial issues including over $110B in debt that is going up at a rate close to $20M every day of the year. As we have said over and over, we do feel the IL WC system can be readily reformed without the need to battle over legislation in Springfield. We are happy to advise Governor Rauner’s staff and/or any of our readers on how to get this done quickly and smoothly—all you have to do is ask. In our view, what Governor Walker is doing in Wisconsin is much too radical and he is trying to “fix-something-that-isn’t-broken.” We don’t feel confusion and chaos is a way to make things better for any of the component players in the WC arena.  


We hope assume Governor Rauner is going to listen to KCB&A and other IL WC participants to make his goals known and let everyone help him to reach them. Gov. Rauner’s first State of the State speech is later this week so we will see what he has to say and report it for our readers next week.


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




Synopsis: Will Illinois’ Workers’ Comp System Ever “Settle” Wage Loss Claims Fairly?


Editor’s comment: After last week’s KCB&A Update article about how the defense industry may counter/defend expensive and questionable wage loss differential claims with “dispatch,” we had numerous readers write and call to confirm one of the unquestionable “kinks” or anomalies in settling such claims. In short, we feel the current method of documenting and settling such claims is challenging and may even be borderline fraud. We look to our readers for guidance on closing this claims “loophole” moving forward.


IL WC wage loss differential claims are supposed to be lifetime benefits with the assumption the worker will have “permanent restrictions” for the rest of their life. The supposed permanent restrictions can be obtained from an FCE that takes four hours of testing. As we have told our readers and lots of FCE providers, we think FCE’s in IL WC are over-utilized and not scientifically significant, so as to justify hundreds of thousands of dollars in WC settlements being paid.


We see lots of claimants coached on how to “fail” such testing to justify the restrictions to be entitled to weekly tax-free benefits for life. Please note the IL WC Act was changed to allow for payments to be challenged for five years or sixty months. When this issue was litigated, our Petitioner-oriented reviewing courts ruled such benefits could only be changed if the “disability” changed. The courts indicated it didn’t make any difference if the worker receiving weekly benefits was making ten times more money than when the benefit level was set, the worker was still entitled the same lifetime benefit. We consider this a controversial approach that doesn’t match the legislative intent of the amendment.


The challenging issue is how wage loss differential claims are handled in lump sum settlements. If an Illinois wage loss differential settlement is lumped out for let’s say $350,000, the money is usually called “loss of use of the body as a whole” and/or put on other body parts. IL Employers don’t get “credit” for such settlements if a later claim is made by the same workers. Such settlements occur without the employee “admitting to” the supposed permanent lifetime job change. This sets up the situation in which an injured worker could get a large amount of money to then “recover” from the permanent restrictions to return to the same trade and then suffer another injury and start the path to getting another large settlement. We had a claim where a worker did this four times before we got the fifth such claim. We were able to stop the claimant and his attorney when we got all the prior records and settlements.


We have tried to draft settlement contract language confirming the worker can never accept a future job requiring lifting higher than their supposed “permanent restrictions.” Arbitrators and opposing counsels refused to agree with or approve such settlements, asserting we were unfairly limiting the workers’ future rights. We responded to outline our position double or triple wage loss differential settlements in one lifetime was tantamount to workers’ comp fraud. Most of the Petitioners’ attorneys and Arbitrators said to raise that issue when dealing with the second or third such settlement.


What do you think? Should lump sum wage loss differential settlements be handled differently? How do you feel they should be worded? Is this the sort of issue that should be brought to the IL Workers’ Comp Advisory Board or the IWCC for their guidance? We appreciate your thoughts and comments.




Synopsis: Lack of Timely Notice for “Repetitive Working” Claim Fails at Longshore WC As It Should In State WC Claims.


Editor’s comment: In Mack v. SSA Cooper, LLC., Claimant Mack worked as a longshoreman for 16 years and retired in 2005, when he last worked for SSA Cooper, LLC. Mack filed a claim under the LHWCA, alleging degenerative disc disease was an “occupational disease” related to his working conditions, including lashing, running a bulldozer, driving the lift and using heavy rods, cables, and turnbuckles. He did not allege our outline a true “accidental injury” or unforeseen occurrence of any kind.


Claimant testified he stopped working in 2005 because his legs started cramping and his doctor told him he had a disc pressing against a nerve, requiring surgery. The employer controverted the claim, indicating its first notice or knowledge of the claim was on October 31, 2013, more than eight years after Mack last worked for them. At the hearing before the ALJ the employer argued Claimant failed to make a prima facie showing because he improperly alleged an occupational disease claim and, to support such a claim, the conditions causing the harm must be present in a peculiar or increased degree by comparison with employment in general.


The ALJ indicated back problems qualified as an occupational disease and therefore was immaterial to the 20(a) presumption. The medical evidence showed Claimant suffered from a back condition requiring surgery, meaning Claimant established he suffered a harm. Mack’s job was described as tough, heavy, physical work that included bending, stooping, and lifting heavy objects. These conditions were felt to cause, aggravate or accelerate his degenerative condition. Thus, the ALJ held Claimant established the prima facie elements and was entitled to the §20(a) presumption. 


The crux of the case was the statutory date of injury. The question of whether Claimant was entitled to benefits under the LHWC Act depended on a determination of when he was aware or should have been aware his employment and injury were related. The ALJ found there was substantial evidence that Mack had not given sufficient notice to entitle him to the §20(b) presumption for Sections 12 or 13. The ALJ further found Mack should have reasonably been aware his injury was related to his work on August 8, 2005 when he first sought treatment for his back condition. The ALJ also noted the  record was replete with evidence Mack was aware, or reasonably should have been aware, of a causal relationship between his injury and his work through both medical advice and loss of wage-earning capacity. 


There was no question Claimant testified he became aware in 2005 he was disabled from longshoring because of his back surgery. Mack also said he last worked on August 8, 2005 because he was totally disabled, and he had not worked since then, and his doctor had told him there was no way possible he could return to work at the docks. These statements showed a direct causal link between Mack’s  work and injury as well as an immediate impact on his wage capacity. The ALJ pointed out, regardless of Mack’s proclaimed lack of awareness, the appropriate standard for determining the date of injury was not subjective, but objective. The medical advice showed Mack should reasonably have been aware of the relationship between his injury and his job in August 2005. There was nothing in the record to indicate SSA knew of Mack’s injury prior to the October 15, 2013 notice.  In summary, the ALJ found the record showed Mack knew or reasonably should have known his injury was related to his employment and his disability affected his wage-earning capacity. The ALJ found Mack failed to provide a satisfactory reason for the late notice. SSA properly raised an objection to the failure to give timely notice, and would be greatly prejudiced if the failure were excused. Accordingly, the ALJ held Mack’s claim is time-barred and the claim was denied.


The ruling was issued on January 12, 2015 and may be appealed. We are simply reporting this decision and it is not our intention to affect the outcome of the litigation in any way. The defense team at KCB&A handles and defends LHWCA and Jones Act claims—if you have questions or concerns about one, send a reply.




Synopsis: Dr. Michael Vender and the great specialists at Hand to Shoulder Associates Now Have Office Hours in Belvidere, IL.


Editor’s comment: Dr. Vender is one of the top hand surgeons in the United States and has a great team of docs working with him. They have announced they are bringing their practice to Belvidere to provide solid care for workers in that area. Hand to Shoulder Associates began in the early 1970?s as a single physician hand surgery practice located in the growing industrial area of Elk Grove Village, Illinois. Over the last 40 years, they have grown to become a renowned center of excellence, recognized across the Midwest U.S. for specialization in injuries and problems of the shoulder, elbow, wrist and hand. The first replantations of upper extremity amputations in the greater Chicago-area were performed by one of the co-founders of HSA in the 1970s. 


With their main office still located in the northwest suburbs of Chicago, HSA is the largest non-university single specialty hand group and one of the largest in the Midwest. They have six board certified or board eligible orthopedic surgeons, each having additional training in the upper extremity and microvascular surgery. They operate numerous office locations throughout the Chicago area.


Their main number is 847 956-0099. Their website is http://www.handtoshoulders.com/




Synopsis: Illinois WC Rates Jump Again and Your PPD Reserves May Be Wrong(!) and Need Retroactive Updating. Send a Reply to Get a Free Copy of Shawn R. Biery’s Updated IL WC Rate-Sheet!


Editor's  comment: There continues to be an upward spiral of IL WC rates. Starting in the 1980’s, the IL WC Act provides a formula which effectively insures no matter how poor the IL economy is doing, our WC rates keep climbing.


We caution our readers to pay attention to the fact the IL WC statutory maximum PPD rate is now $725.81. When it was published, this rate changed retroactively from July 1, 2014 to present. If you reserved a claim based on the prior rate for the period from July 1 to right now, your reserves are wrong. If you have a claim with a date of loss after July 2014 and a max PPD rate, you need to take a look and see if the new maximum PPD rate applies. If this isn’t clear, send a reply to Shawn at sbiery@keefe-law.com.


The current TTD weekly maximum has risen to $1,361.79. A worker has to make over $2,042.69 per week or $106,219.62 per year to hit the new IL WC maximum TTD rate. Do such folks truly need full TTD value? Does any state in the United States have a TTD maximum that high?


The new IL WC minimum death benefit is 25 years of compensation or $510.67 per week x 52 weeks in a year x 25 years or $663,871.00! The new maximum IL WC death benefit is $1,361.79 times 52 weeks times 25 years or a lofty $1,770,327.00 plus burial benefits of $8K. On top of this massive benefit, Illinois employers/governments have to pay COLA increases.


The best way to make sense of all of this is to get Shawn Biery’s colorful, updated and easy-to-understand IL WC Rate Sheet. If you want it, simply reply to Shawn at sbiery@keefe-law.comand he will get a copy routed to you before they raise the rates again!